Unlike refinancing your mortgage or taking out an equity loan, an equity sharing transaction enables you to turn your equity into cash without incurring debt or selling your home. Accessing your home equity is generally done for home improvements, healthcare or education expenses, or for retirement funding. The typical way of accessing your equity is through borrowing against the value of the home using a home equity line of credit (HELOC). Now there are alternative programs, for certain individuals, such as reverse mortgages. While you do receive cash proceeds from these methods, they are loans and are required to be paid back over the course of time. Unlike a reverse mortgage, HELOCs require monthly payments of interest and ultimately principal, but both are indebtedness requiring a payback.
Further, when selling your home, these loans must be paid off in full before you receive any additional proceeds from your residual equity. In other words, if the value of the home has gone up, you have benefited through the appreciation, yet if the home value declines, you as the owner incur the loss, rather than the lender.
This is where PRIMARQ comes in. Rather than borrowing against your home, incurring monthly payments and being solely exposed to home price movements, PRIMARQ offers you the opportunity to access your equity with a new source of funding, equity investors who passively purchase a percentage of your home. Under the equity sharing arrangement, the investor will become a co-owner in your home by paying you for the percentage purchased. The investor’s motivation is to participate in the future appreciation of the home. This type of financing structure does not require monthly payments, is not a loan against the home, with the investor also bearing the risk of price declines, unlike a lender.
So if you are looking to monetize a portion of your equity, consider equity sharing through PRIMARQ as an alternative to incurring more debt and the resultant payments.