Frequently Asked Questions
What is PayHome™?
PayHome™ is a shared-equity home agreement whereby cash is provided to home buyers, or owners, in return for its repayment in addition to a participation in the home appreciation, if any.
Do I share in the ownership of the property
There is no sharing in the ownership of the home. You are and remain sole owner of the property.
Why should I consider PayHome?
With PayHome, you can save on a down payment, reduce mortgage payments, buy a more desirable home, and obtain a higher return on your home investment (down payment). However, you give up a big chunk of the value the home might gain. You should therefore consult with financial or legal advisors to ensure PayHome is suitable for you.
How do I apply for PayHome?
You can go to Apply for the requirements and application. The cash requested may not exceed 15% of the home appraisal by the lender's independent certified appraiser and by our appraiser. Home buyers and owners must make and hold a minimum 10% down payment (equity).
How long does it take to process my application?
Your application will be processed within four business days.
When do I obtain the funds?
The cash requested, less the 2% transaction fee, will be paid through escrow at the closing on the home but only after we have received all the required documents.
Must the funds be used for a down payment?
No. The funds provided may be spent any way you want.
How can I maximize the return on my home investment?
You maximize the return on your home investment by minimizing your down payment.
Why do I obtain higher return on my home investment (down payment) with PayHome?
It is because the higher leverage obtained from a smaller down payment, meaning that a small increase in home price will result relatively in a larger increase in home equity.
When can I pay off PayHome?
You can do so at any time. However, there is a prepayment penalty within the first two years of home ownership with an increase in the Equity Buyout ratio - see below.
What is the Equity Buyout Ratio?
The Equity Buyout Ratio is a multiple of the percent of the home purchase price that we invested to determine our share of the home price appreciation and your payment obligation - see Savings. The Equity Buyout Ratios in the following years are:
Can I pay off part of PayHome?
Yes, at any time. However, you will have to prepay the expense for a full home appraisal.
When is PayHome called?
PayHome may be terminated after the fifth year from issuance of the agreement.
How is the value of my home determined upon the payoff of PayHome?
You may obtain for free a comparative market analysis (CMA) from a realtor. Secondly, you may obtain an appraisal from a certified appraiser of your choice.
What if there is a discrepancy between valuations?
If we cannot agree on an appraisal value, the mutual appraisers appoint a third independent/certified appraiser to arrive at a value. Costs of the appraisals are deducted from the final appraised value in determining the payment obligation.
Can I obtain a PayHome as a home owner?
PayHome is available to home owners who are gainfully employed and whose mortgage payments are fixed and current. If you qualify for a PayHome, you must pay for the certified appraisal of your home.
Are there any hidden fees?
No. The only fee is a 2% transaction fee.
Is there a prepayment penalty?
Yes, if PayHome is paid off in part or in full before the third year of home ownership, the prepayment penalty is an increase in the Equity Buyout Ratio from 4 to 5.
Are there any penalty fees?
Yes, the Equity Buyout Ratio increases half a point (0.5) per infraction or breach of contract. The Ratio is capped when our share of the net home price appreciation reaches 75%.
Which homes qualify for PayHome?
The homes must be single-family detached ones that are used as owner-occupied principal residences. They must offer above-average appreciation potential in a community listed under Markets. Homes in communities not listed may be considered, see Apply.
Can I sell my home at any time?
Yes, you can sell your home at any time. However, there is a prepayment penalty if you sell the home within the first two years of home ownership. The penalty is an increase in the Equity Buyout Ratio from 4 to 5.
Can I rent my home?
You may rent your home only under extenuating circumstances and upon our written approval because tenants may cause damages to the home which will depreciate its value.
Are home improvement costs reimbursed?
Any home improvement which has enhanced market value upon payoff of PayHome, according to certified appraisers, will be reimbursed pro rata. To ensure such reimbursements, homeowners must keep all receipts and obtain written approval before undertaking the improvements.
What if my home decreases in value?
If there is a loss in home value, the cash provided is repaid out of the remaining equity, if any.
Can I obtain a mortgage on this Website?
Yes, you can go to the Mortgages tab or you may contact us. Our mortgage partners are of course familiar with PayHome.
What are your mortgage partners' rates?
To compare fixed-rate mortgages with those offered by our mortgage partners - see Mortgages.
Can I seek another loan or note against the property after obtaining a PayHome?
Unless you wish to pay off PayHome, you cannot secure another loan or note against your property without our approval because it will encumber the return of the cash provided at purchase of the home.
Are there any tax issues that I should be concerned about?
We suggest that you consult your tax advisor for any possible issues in your particular situation.
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