How It Works
Finance your future with Newfi. Mortgages designed with you in mind.
How It Works
EquityChoice is a new type of residential second mortgage (called a Shared Appreciation Mortgage) that is designed to give homeowners access to a portion of their home equity wealth with more flexible terms than traditional home loans and lower costs and more safeguards than non-regulated equity investment financing options.
With Equitychoice, you don’t owe monthly payments until the end of the loan term. At that time, you’ll make a single payment which includes:
- the initial amount borrowed
- interest that compounds monthly at a “below market” fixed rate
- a share of your home’s future appreciation
The EquityChoice Advantage
Safeguards
EquityChoice by design is the only shared appreciation product that is a residential mortgage. This significantly differentiates our financing solution from other equity-sharing programs because of safeguards that:
- limit how much you can owe based on state-specific, regulatory high-cost caps
- abide by standard loan terms and lender obligations that are regulated by state and federal authorities
- require the loan to be originated by an approved, active NMLS licensed loan officer
- create transparency with loan processing and servicing which follows standard mortgage industry practices
- offer flexibility with the amount you choose to borrow and the choice of a loan term as low as 10 years
The Details
Proceeds
The choice is entirely up to you; however, we do suggest thinking of long-term strategies that can assist in diversifying your investments, building wealth with the time advantage of immediate funds available, and increasing monthly cash flow. Common use cases include:
- buying a second home or rental property
- reinvesting in assets with high-yield potential
- adding monthly cash flow
- making “value added” home improvements or renovating to “age in place”
- starting or funding an existing business
- investing in or paying off educational expenses
- funding long-term expenses and/or retirement needs
End of Term
When the loan matures, you have various options for paying back the outstanding loan balance such as:
- using funds from savings, income from real estate properties, or other investment accounts
- refinancing with a traditional mortgage or home equity loan using part of the proceeds from selling the home