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

Immediate access to funds that can be utilized now, up to $500,000

A below-market, fixed interest rate for up to 20 years, approximately 4-8pts. *lower than most traditional home equity products

No interim or monthly payments required

Tax advantages for homeowners, business owners, and investors (consult tax advisor)

Increase cash flow with the ability to reinvest funds to gain investment income

No prepayment penalties, full or partial at any time

Unrestricted use of funds for reinvestment or preservation of assets

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

Get Started Today