Savings (site under construction)

Save or Buy A Dream Home

We hope to earn a return on PayHome by sharing in the home appreciation, if any. We thus have the option after five years to call our investment and receive a percent of the net home appreciation in addition to the cash provided upon purchase. Our interest in the home cannot be encumbered by any debt obligation other than a single fixed-rate mortgage.

PayHome is the amount of cash requested before a transaction fee of 2%. For example, on a $1,000,000 house with a 15% Payhome, you can save $147,000 upon purchase ($150,000 less 2%) to use for any purpose:

Home	$1,000,000	$1,000,000
Down Payment	$200,000	$50,000
PayHome	--	$150,000
Mortgage	$800,000	$800,000
Savings (after fee)	--	$147,000

With PayHome, buyers can afford a nicer homes. For example, assume a buyer has $200,000 in savings, qualifies for a $800,000 mortgage, and obtains a 15% PayHome less 2% fee, i.e.,13% for the unaffordable home:

Home	$1,000,000	$1,172,000
Down Payment	$200,000	$200,000
PayHome	--	$172,000
Mortgage	$800,000	$800,000

Upon payoff, the homeowner repays the cash provided in addition to a percentage of the net price appreciation. The percentage is the percent of the home purchase price that was invested multiplied by an Equity Buyout Ratio of 3.5 to 1. In other words, if the cash was 10% of the purchase price, the owner repays the cash in addition to 10% x 3.5 or 35% of the net price appreciation.

For example: PayHome of 10% on a $1,000,000 house that appreciates to $1,100,000. The homeowner will repay the 10%, or $100,000, plus 35% of the $100,000 appreciation for a total of $135,000. The homeowner's capital gain will be 65% of the appreciation or $65,000.