A smart alternative to a reverse mortgage
For many Americans, home equity often represents the largest piece of personal wealth, yet many overlook it as a tappable asset. If you’re nearing or already in retirement and looking to bolster your income, your home equity is a source to consider.
Until recently, reverse mortgages were the only option for older generations to cash out significant home equity without having to move, but the restrictions and complicated math involved can make them an unattractive option. The Figure Home Advantage is a residential sale-leaseback that offers homeowners of any age the benefits of selling without moving.
The basics of the Figure Home AdvantageTM
Unlike a reverse mortgage, the Figure Home Advantage is simple to understand. It works like this: Figure buys your home at a price based on comparable home sales and gives you a lease to live there as long as you’d like1, 2. You’ll get the cash from the sale, a lease so you can stay in your home, and none of the responsibilities of owning a property, like property taxes, upkeep, or repairs. You can choose to automatically renew your lease annually3 as long as you stay current with your payments, and if you decide later that you want to own again, you can buy your home back.
Compared to a reverse mortgage, the Figure Home Advantage has several benefits.
Five advantages over a reverse mortgage
1. More cash up front
With the Figure Home Advantage, you can receive up to 90% of your home’s value in cash. Compare this to a reverse mortgage, which may convert as little as 38% of your home equity if you’re only 62. This means if you were 62 years old and had a home valued at $300,000 and no mortgage debt, you could get $270,000 using the Figure Home Advantage, while you would only pocket $114,000 with a reverse mortgage.
If you still have a mortgage on your home, the balance would be paid from the proceeds whether you go with a Home Advantage solution or a reverse mortgage.
2. Worry-free, hassle-free home living
Figure Home Advantage makes life easier. Users get all the benefits of living in the home they know, without the added costs of ownership. That means the regular expenses of owning, like homeowner’s insurance, property taxes, normal upkeep and maintenance, are not your problem. And surprise repairs – like a leaking roof or failing water heater – are taken care of by Figure. Under a reverse mortgage, all of these charges continue to be your responsibility.
3. Clear and transparent terms
Before you enter into a Figure Home Advantage agreement, you’ll know exactly how much money you’ll receive and how much you’ll pay each month, making it easier to manage expenses and plan for your future. Reverse mortgages, in contrast, incorporate several elements that can make it difficult to understand how much money you’ll get, what the loan actually costs, and how much equity you’ll have at the end of the term.
4. No hurdles between you and your money
The Figure Home Advantage has no age-related eligibility requirements. However, your current equity and the condition of your home are considered. Reverse mortgages, on the other hand, typically have several eligibility requirements for borrowers, including a minimum age for both spouses; no federal debt delinquencies; proven means to continue paying for ongoing property charges like property taxes and insurance; and a counseling session with an approved agency.
5. Bigger opportunity to enjoy your cash
More money often translates to more opportunity. Have you been thinking of traveling more, taking care of expenses, or maybe investing in a diversified portfolio that goes on to pay you back? With the Figure Home Advantage, you receive a lump sum of cash to do whatever you’d like. Some reverse mortgages allow a lump sum payout, but they often come with a higher mortgage insurance premium (and remember, you’ll already likely be getting less cash).
We understand that your home and retirement are very personal and making any big change requires careful thought and consideration. That’s why we make the process easy, and we support you along the way. To start, you will have a conversation with a Figure Home Advantage consultant who will explain the entire process and answer all your questions. A property inspection, an in-person appraisal and a title search will be completed. Based on the result, we may make you an offer1. Then, you can decide if you want to move forward; if you do, we’ll buy your home and lease it back to you1. Your Figure Home Advantage consultant will be available to you during the entire process to answer any questions that come up and help you along the way.
Determining what’s right for you
If you want to ensure you have enough money for retirement, the Figure Home Advantage can be a smart alternative to a reverse mortgage for many homeowners. While both solutions help you to continue to live in your home, only one relieves you of the pains and responsibilities of ownership while giving you access to your built up cash.
You’ve worked hard to have your home, maybe it’s time to let it work for you.
1. Home values and resulting equity are based on our assessment of independent data sources and Automated Valuation Models. We may use alternative sources of data and/or appraisal to confirm or verify your home value.
2. The purchase price and option to repurchase are dependent on many factors, including your home value and the terms of the sale contract. Also the lease terms and escrow amounts available to you are dependent on many factors, including your credit profile, and income at time of application. The proceeds you receive will be net of fees and costs. Figure Home Advantage is only available for a single-family residence that is your primary residence. We are unable to purchase homes that are other types of dwellings, including but not limited to: multi-family dwellings, TICs, co-ops, condos, and manufactured homes. Figure Home Advantage is currently available in Atlanta, GA; Cincinnati, OH; Cleveland, OH; Dallas, TX; Houston, TX; Jacksonville, FL; Philadelphia, PA; Phoenix, AZ; Pittsburgh, PA; Reno, NV; San Antonio, TX; and Tampa, FL.
3. Rent may increase annually at the beginning of each new lease term.