What is EquityKey?

The Solution to a Growing Problem

People are living longer than ever. That’s a good thing, right? Unfortunately, blessing is met with the cost of maintaining a healthy, quality lifestyle longer than expected. Seniors currently holds trillions in real estate equity which led the founders of EquityKey to commit to revolutionizing the way that seniors fund an active life, retirement dreams, healthcare needs and estate planning goals.

The EquityKey program is a debt-free alternative for those between the age of 65 and 85 who are considering a reverse mortgage or other home loans. Rather than going into debt and risking the present equity you have worked so hard to build, we believe there is a better solution. With EquityKey, you have the opportunity to receive debt-free cash today, and in exchange, we obtain the right to participate in the future appreciation of your home. The current equity in your home remains yours. The money you receive from EquityKey is based on the current value of your home. And unlike a reverse mortgage or home loans, this money does not accrue interest or have to be paid back as long as you abide by your agreement with us.

What if My Home Depreciates in Value?

You still keep the money that EquityKey paid you. We believe that real estate is a sound long-term investment. If your home loses value then we lose the money we have paid you. The amount you receive from EquityKey is not a loan and does not create debt; therefore, we assume the risk of loss if your home does not grow in value.

What if My Home Appreciates in Value?

You keep the money that EquityKey paid you. We share in any increase in your home’s value (if any) after we enter into our agreement. The percentage of appreciation that you retain is detailed in your agreement with us.

Partners in Growth

Years from now your home will most likely be worth more than it is today. We believe our investment in your property will result in us receiving more from our share of the future appreciation than the amount we pay you to participate. We view this as a win-win. We provide the cash you need or want today and look forward to sharing with you in the growth of tomorrow.

*If, at the end of your agreement term, EqutiyKey acquires your property, we will charge an acquisition cost equal to our actual third party costs to sell it. This cost will never be more than 8% of the fair market value of the house at that time. There can be no guarantee that participation in the EquityKey program is suitable for you. Please consult your own legal counsel, financial advisor, tax planner and any heirs to your estate before making a decision to participate in the EquityKey program.

Scenario 1: Single Homeowner

Sample Deal:

ONE HOMEOWNER, 73 YEAR OLD MALE
SHARE 50% OF APPRECIATION
INITIAL HOME VALUE: $600K
Homeowner receives $90,000 today fee from EquityKey.

		APPRECIATION	FINAL VALUE: $1.2 MIL	Homeowner keeps a premium of $90k EquityKey purchases the house for $804,000 equal to the market value, minus 50% of the future appreciation purchased & the acquisition costs of $96K* (or heirs keep property and pay EquityKey $300K)
		NO CHANGE IN VALUE	FINAL VALUE: $600K	Homeowner keeps investment fee of $90k EquityKey purchases the house for $540,000, equal to the market value minus acquisition cost $48k. (or heirs keep property and EquityKey walks away with nothing)
		DEPRECIATION	FINAL VALUE: $450K	Homeowner keeps a premium of $90k In this example, EquityKey would not purchase the home, and no further transaction is necessary.

 

Key Questions

How does EquityKey make money?
EquityKey believes the growth of real estate will outpace the payments we make to clients. We are willing to invest money today to share in the potential profit of the future. EquityKey realizes its profit at the end of the agreement.

What is the EquityKey Participation Rate?
The Participation Rate is the percentage of the appreciated value of the participant’s home which they agree to share with EquityKey, either: 1) when they sell the home, or 2) when they pass away. For a single qualifi ed homeowner, the Participation Rate is 50%. If there are two homeowners and both wish to participate and are qualified, the Participation Rate can be 100%, and both would receive payments from EquityKey. For instance, for a single qualifi ed homeowner and a 50% Participation Rate, EquityKey will receive 50% of the increased value of the home when the owner passes away or sells the property.

How much money will I receive in the EquityKey Program?
The dollar amount of the lump sum is based primarily on the current value of the home (70% Loan to Value is the minimum requirement), the Participation Rate, and how well the client(s) can qualify for life insurance. For each participant, the lump sum option is between 12%-15% of the home value (24%-30% if both participate).

Do I ever have to pay the money back to EquityKey?
No, as long as you keep up your end of the bargain. The money received is not a loan, line of credit, or debt of any kind. Participants receive a lump sum or monthly payments in exchange for the future and unknown appreciation of their home. (Please refer to the EquityKey contract for a complete description of your responsibilities as a homeowner in the EquityKey Program)

What happens to the home?
Plan participants maintain their rights and obligations as homeowners as long as they own the home and throughout their life, regardless of whether or not they continue to reside in it. EquityKey’s only interest is its share of the future appreciation above the initial appraisal value. To realize this share of appreciation, EquityKey purchases the home upon the client’s death, if the heirs pass on their right to buy the property. When EquityKey buys the home, we do so at fair market value minus our share of appreciation and acquisition costs.

Does EquityKey always purchase the property? What if I want my home to stay in my family?
If your family wants to keep the property that is fine, they have the option. The family will always have first right of refusal. If they choose to keep the property, they will need to pay EquityKey their portion of the growth per the agreement. If the family does not want the property, EquityKey has the option to purchase the property. They will hold back 8% of the current value for 3rd party selling charges and any repairs that are needed on the property and payout to the heirs (usually within 30 days) their portion of equity.

What responsibilities will I have after signing an EquityKey Investment Agreement?
Please refer to the EquityKey Investment Agreement for a complete list of your obligations which include, but are not limited to:

• Maintaining an appropriate amount of property insurance on your home
• Repairing your home if it suffers significant damage
• Not allowing liens to be placed on the property other than those approved by EquityKey and arising upon the refinancing of your mortgage (so long as the loan value is less than 70% of the value of your home)
• Not defaulting on any debt you may have secured by your home
  
  Because you will have additional obligations, you should carefully review the EquityKey Investment Agreement with your own advisors to ensure that you understand all of your obligations.

Review

	Not a debt. The money you receive is yours to keep,* in exchange for a percentage of the future appreciation of your property.
	No Closing costs: Small application fee ($300), which is refunded if you do not qualify or your transaction funds.
	You do not have to live in your property. You can move out or rent your home at any time as long as you maintain your ownership interest in the property.*
	The amount you can receive is based on the appraised value of your home, the percentage of your home’s appreciation offered to EquityKey, the expected term of your agreement and your insurability.
	Eligible Properties: Primary residences, Rental, commercial, or investment properities
	Minimum age requirement: 65 (only one homeowner must qualify)**
	EquityKey purchases a life insurance policy on each qualifying homeowner. To qualify, applicants must be approved by a life insurance carrier.
	Payment options: lump sum or monthly payments upon request.

 

* As long as you abide by the terms of your agreement
** All owners on title must be at least 50 years old.