Hello All
There are a number of solutions for… the DEPOSIT which is needed to secure a loan and buy a property. Many great minds have attempted and more recently are looking into Shared Equity as a deposit solution to ease the housing crisis.
The following is my snippet overview. May offer a perspective/ clarity for personal ownership preference: Shared Equity versus keep 100% Title and 100% Equity.
Recap, property equity is the increase in the potential future value at a given period of time, Example:
· Property purchase price: $550,000
· Potential capital growth per year: 5%* compound rate
· 10 years
· Potential future EQUITY: $345,892*
Shared Equity as a deposit solution
Is where another entity contributes cash funds towards the deposit. On the conditions that:
· At some point in time these funds are to be paid back, and may include interest payments. In addition to these funds;
· A share of the EQUITY (future property value) must be paid
Each service provider (including the Government programs) would have specific terms; i.e, percentage of shared equity (10% to 40%), interest charges, service cost to applicant, applicants’ eligibility, may include entity name on title, thus best to confirm each service providers terms.
20% Shared Equity Scenario
> Deposit: $110,000
> Shared Equity: $69,178 portion
> Total to be repaid: $179,178 – Plus interest and other costs where applicable
> Portion of Title and Equity retained: refer to service provider agreement terms
> Important to understand the potential of refinancing as an option to meet the agreement terms and take 100% ownership
Keep 100% Equity Ownership – AffordAssist Interest Free Deferred Deposit solution
AffordAssist is a community centric approach think of ‘pay it forward’.
AffordAssist replaces the need for the full cash deposit, making it possible to buy today (from willing property sellers) with an initial part-deposit and to pay the balance of the deposit most typically within 60 months, and always without interest. Retain 100% Title. AffordAssist provides an innovative Deferred Deposit Agreement (DDA) for the amount needed to secure a loan. Secure a loan and buy a property with as little as 1% initial part-deposit.
AffordAssist Scenario
> 90% Loan (including LMI)
> Initial part-deposit: $1,000
> Deferred Deposit: $67,118 (includes LMI) estimate only
> The potential of refinancing as an option may be possible within two – three years
> Keep 100% Title and 100% Equity: $345,892
I hope that helps with perspective/ clarity for personal ownership preference
Click here to view website/ Apply: https://www.affordassist.com/
B2B – AffordAssist provides and manages the governance process. Are you a broker, lender, developer or agent? Join our mission to help increase home ownership. We welcome your team work; together we can help more into home ownership.
Kind regards
AA
*A word of caution: Future predictions cannot be determined by past performance, for any asset class