Friday, May 2, 2014
Reverse mortgages or home equity credit lines can help home owners in a financial pinch, but require interest payments and incurs debt. Now there may be another option. EquityKey and FirstREX, California based financial companies, offer shared appreciation agreements, which give homeowners cash with no restrictions on use in exchange for a portion of the home’s appreciation value later. These plans work best for homeowners who do not plan to move in the recent future, as selling the home too early can result in owing money to the company. It is important to review the agreement carefully, as it creates liens against the property that the company can enforce in court. The service areas for both companies are limited to a few states, but both plan to expand.
See Kenneth Harney, How to Tap Home Equity Without Owing Interest, Forbes, April 25, 2014.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.