I wrote about Real Estate Equity Exchange, Inc. (REX) a few months ago and recently there has been a large amount of press about the product. REX’s product offers homeowners cash for the rights to share in the proceeds of their property when it’s eventually sold. The Real Estate Journal provides a good example of a sample transaction in the article “Product Taps Home Equity Without Taking Out Loan” which you can read below.
The owner of a home valued at $750,000 might obtain $100,000 in cash by giving REX a 50% share of the change in the home’s value. If the home sold for $850,000, REX would receive $150,000 — the original $100,000 invested plus half of the increase in value. If the home sold for $650,000, REX’s share would be $50,000, half of what it had invested.
If you are looking to see more examples, REX provides a calculator that shows how much cash a homeowner would be able to receive using the product on their web site. Also, REX recently added a new feature to the product which acts as a pre-payment penalty of sorts that starts at 25% of the amount advanced in year 1 of the agreement and phases out 5% per year until the end of year 5 it then disappears. According to the web site a REX agreement typically (different in IL and & NC) remains in place until the earlier of 50 years or when the homeowner sells the home.
REX is looking to offer the product through different business channels like mortgage brokers, real-estate agents, and financial planners. Currently the product is available in California, New Jersey, Virginia, Florida, Illinois, Washington, Colorado, New York and North Carolina. To read a copy of the WSJ article click the link below.
Product Taps Home Equity Without Taking out Loan (WSJ)
Technorati tags: REX, Reverse Mortgage, Reverse Mortgage News, Reverse Mortgage Alternative, Home Equity
