We are being bombarded with new ideas and concepts so much it is hard to stay current. However, here is a new program being presented to seniors, and as that is our market, thought you folks might like to know about this.
Well, this is what I take for the site - EquityKey gives the client, take a single person, around 15% of the home's value. Take a $250,000 home and that's $37,500. Now note that the fine print says EquityKey gets a 10% disposition "fee" and "other fees may apply" which means from the start EquityKey has almost no risk.
They're giving around 15% and making it right back in fees at the time the house is sold - plus, the 10% fee is based on the appraised value of the home. Plus, this is underwritten, so they'll be banking on their average client living at least 10 years past the contract time - now the house is worth $350,000 and that 10% fee just gobbled up $35,000 - plus other nefarious "fees" they don't plan on discussing on their website.
Not only that but they also profit 50/50 off the rise in value of the house all while being fully protected by issuing a life insurance policy the covers the amount given.
I'm not seeing where any of this is remotely worth the paltry amount of money the client receives.
Ps: Oh, and they own the home. Upon the passing of the client EquityKey buys it. If the heirs want the house they must purchase it from EquityKey minus an assload of fees.
*Any purchase price paid by EquityKey for your home will be less a fi xed disposition cost which is equal to 10% of the initial appraised value of your home; other fees may apply. There can be no guarantee that participation in the EquityKey program is suitable for you. Please consult your own legal counsel, financial advisor, tax planner and any heirs to your estate before making a decision to participate in the EquityKey program.
and How much money will I receive in the EquityKey Program?
The dollar amount of the lump sum or monthly payments is based primarily on the current value of the home, the Participation Rate, and how well the client(s) can qualify for life insurance. For each participant, the lump sum option is between 12%-18% of the home value (24%-36% if both participate) and the monthly payment option is between 0.9%-2.5% of the home value per annum (1.8%-5% if both participate).
------------------------------------ Health Insurance Agents: Training, Support, Discounts, E&O for $440 www.ihiaa.com
Very confusing to me also. Just based on the site I'm assuming a term policy is taken out covering the value of the home which is what they use to purchase the home upon death.
How does EquityKey make money?
EquityKey believes the growth of real estate will outpace the payments we make to clients. The risk for EquityKey comes in the form of an untimely death of a participant, which would prevent EquityKey from participating in the long-term appreciation of a participant’s property. This is one reason why EquityKey must own and maintain a life insurance policy on all participants. The policy mitigates risk and, more importantly, provides EquityKey with the necessary liquidity to purchase the home upon a client’s passing.
So basically, my neighbor is 65 and in decent health, lives alone in a $200,000 house:
1) He takes out a $400,000 term policy and names me as a beneficiary - I pay the premiums. (My assumption is the term policy must be enough to cover the probably value of the house at the time of death)
2) We sign a contract where I own his house upon his passing, get a 10% fee to buy the house, I keep 50% of the increased value of the home, the estate gets the initial appraised value plus 50% of the increased value.
3) I cut him a check for $30,000.
4) He dies 10 years later and the house is worth $300,000. I get $400,000 from the insurance company and buy the house. I pocket $100,000 from the policy, $30,000 in fees (10% fee) and $50,000 for 50% of the increased value = $180,000. My liabilities were the insurance premium payments.
5) The estate gets $200,000 plus $40,000 (50% of the increase minus the fee) = $240,000.
Last edited by healthagent : 07-07-2007 at 07:39 AM.
Sounds too confusing. Reverse mortgages, while I am not advocating them, have no underwriting, no payments, and you do not have to refi the entire amount of the home.
------------------------------------
"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." Ronald Reagan
Well, with this deal they have to health qualify and obviously they'll be looking at the house and neighborhood - so the house also has to qualify.
Morally I don't think a company should profit in the death of anyone. I can't picture my father passing away and people somewhere popping champagne corks.
Last edited by healthagent : 07-07-2007 at 03:27 PM.
All I can tell you is I've seen this advertised in the newspaper (I think they had a seminar - surprise!). I looked into it and decided it was a scam. Creative, though!
I first heard about this on a financial talk show on business radio...Ray Lucia. (i know i've mentioned his name before elsewhere). A woman called in asking about this program for they had been contacted...and she mentioned it was an international life co doing this.
Lucia told her he smelled a scam, and questioned the insurable interest invovled. (called her a moving target if she did this ..ha)
Personally, I think all these creative ideas revolving around the equity of one's home is dangerous....and it's like the devils' web spun to rob people of their homes. I know, i know, the Great Depression robbed people of their homes too. Did you know that many lost their homes in that era because they couldn't afford to pay their property tax!
Right. As soon as this company even got a whiff that they're losing money - be it a decrease of property values or anything else, the loan would probably be instantly recalled leaving the client is a horrendous situation.
Re: EquityKey: Unlocking the Future Value of Your Home TodayTM.
Would you consider selling 50% of the future equity of your home, land or commercial real estate if you were paid cash…today? And, the current equity/value of your property will be yours to keep.
EquityKey may purchase your future equity if you are a qualified owner. The program is straight forward and is subject to applicable terms and conditions. How You Would Qualify: At least one owner must:
Be 65-85 years old
Owe less then 80% of the home’s value
Have at least one property value/equity worth $350K+
Be in good health (no Type 1 diabetes, no smokers, no recent bouts with cancer and no uncontrolled high blood pressure or severe cardiac issues.)
Who is EquityKey?
Owned by KBC Financial Products, a subsidiary of Belgium-based KBC bank NV
KBC manages an estimated 450 billion in assets, 11 million customers in 30 countries
KBC is focused on working with private clients
What are the Benefits?
Each qualified owner can receive cash equal to 10-15% of the property value
No closing cost are involved - just a simple application fee (refundable if not qualified or when the program funds)
Funds are NOT a loan. (This is NOT a reverse mortgage)
Equity Options USA is a Certified EquityKey Broker and will be happy to answer your questions regarding this opportunity. Please contact David H. Schwartz, (877) 777-4727.
Re: EquityKey: Unlocking the Future Value of Your Home TodayTM.
Would you consider selling 50% of the future equity of your home, land or commercial real estate if you were paid cash…today? And, the current equity/value of your property will be yours to keep.
EquityKey may purchase your future equity if you are a qualified owner. The program is straight forward and is subject to applicable terms and conditions. How You Would Qualify: At least one owner must:
Be 65-85 years old
Owe less then 80% of the home’s value
Have at least one property value/equity worth $350K+
Be in good health (no Type 1 diabetes, no smokers, no recent bouts with cancer and no uncontrolled high blood pressure or severe cardiac issues.)
Who is EquityKey?
Owned by KBC Financial Products, a subsidiary of Belgium-based KBC bank NV
KBC manages an estimated 450 billion in assets, 11 million customers in 30 countries
KBC is focused on working with private clients
What are the Benefits?
Each qualified owner can receive cash equal to 10-15% of the property value
No closing cost are involved - just a simple application fee (refundable if not qualified or when the program funds)
Funds are NOT a loan. (This is NOT a reverse mortgage)
Equity Options USA is a Certified EquityKey Broker and will be happy to answer your questions regarding this opportunity. Please contact David H. Schwartz, (877) 777-4727.
Warm Regards,
David
sounds like a viatical settlement for homewoners to unlock equity. Wouldnt a reverse mortgage be a better option?
New Twist: Equity Key
Linear Mode
