Real Estate Equity Exchange, Inc. (Rex) has released a product that will give consumers up to 15% of their homes value in exchange for a cut of up to 52.5% of the capital appreciation when the property is sold. The way it’s broken down is Rex gets 3.5% of the gains for every 1% it pays the consumer for the option.
Mr. Hanson from Liberty Reverse Mortgage noted in the article “the biggest downside is the 50% of capital gains for a measly 15% of the house.” I agree with Mr. Hanson but if your are unable to qualify for a reverse mortgage this could be a good option. Rex’s managing director Jeff Cusack notes that, “Rex shares in the downside with the homeowner-something an originator of a reverse mortgage doesn’t do.” The borrower is not required to repay any of the 15% it would receive to enroll in the program which is the overall benefit for the consumer. At the moment this program is being offered in Florida, Illinois, New Jersey, Virginia, and Washington. Below is a link to the full article.
Have a great weekend!