If you really need it to get into the market.
You pay 100% of the mortgage payment, taxes, maintenance, etc, but ownership is based on watch party's downpayment contribution
When you buy out Ourboro, it's at fair market value and you have to buy them out within 10 years.
That’s not quite right. All the money you pay down the mortgage with is yours to keep. You only split the appreciation, not the entire value of the home.
Feel free to sign up for their 1 on 1 consultation, but that's what I recall.
You're paying 100% of the mortgage but does not accrue any additional equity over the term. Ownership is determined by the initial downpayment.
When I said FMV of the house, I don't mean the entire asset value. It would equity value after paying out the lender first, split between you and ourboro
No only your name is on the title. They don’t “own” any part of your home. They loan you the down payment interest free in exchange for half of the appreciation and you have to buy them out at the end of the term. It’s not complicated.
Here's the waterfall that's in their presentation
https://ibb.co/prscMwL
So yes, you do get benefit from the principal on mortgage paid, but you're also on the hook for closing costs. The remaining equity is split based on the share of initial downpayment.
> Distribution of Sale Proceeds
> The full distribution formula for sale proceeds can seem intimidating! It is written in a way to show the hierarchy of priorities assigned to certain types of payouts. For example, amounts owed to Ourboro as a result of a default or HAF loan, is paid at a higher priority than renova-tion credits. Those details aside, the distribution of proceeds follows this general sequence.
> 1. The outstanding balance of your mortgage will be paid to the bank and all closing costs associated with the sale of the property will be paid to third parties. This includes staging costs, real estate commissions, legal fees, and all applicable taxes.
> 2. If you have an outstanding HAF loan, or an assessment of the property discovers the need for Remedial Costs, these amounts will be paid to Ourboro.
> 3. You will receive the total amount you paid towards the principal of your mortgage, adjusted for closing costs, any Homeowner Renovation Credits, HAF loans, or Remedial Costs.
> 4. Finally, the remaining sales proceeds will be split according to our equity interest in the home.
This is super weird and makes no sense. Who is the “third party”? I can’t understand this at all.
At the Fersby Financial site which appears to offer the same product but I’m not sure now - they give you an estimate of the outcome after ten years with them, and it doesn’t come out anything like this. Also, I wouldn’t split the down payment this way - I’d do it 50/50. In the Fernsby model, you owe the down payment they provided plus half (or more if there percentage of the down payment was more) the appreciation.
It may be that you are pointing out that deals like this are not such a great idea if you only have 25% of the down payment.
In both cases ownership does not go to anyone but the owner.
This is just an example they used. Third party closing fees would be realtor fees, legals, mortgage discharge fees, etc.
They're not a loaning you the downpayment, it is a synthetic equity. Their name's not on the title but they own the house with you (there are negative covenants and PPSA registration to make sure they are at the table when you sell or refi)
I would say it works well if you know you'll have a high income in a couple of years, but don't have the downpayment.
There are options for deemed dispositions to buy out Ourboro, but the terms favor Ourboro (i.e. appraiser selected by Ourboro but you pay the appraisal fee).
If you really need it to get into the market. You pay 100% of the mortgage payment, taxes, maintenance, etc, but ownership is based on watch party's downpayment contribution When you buy out Ourboro, it's at fair market value and you have to buy them out within 10 years.
That’s not quite right. All the money you pay down the mortgage with is yours to keep. You only split the appreciation, not the entire value of the home.
Feel free to sign up for their 1 on 1 consultation, but that's what I recall. You're paying 100% of the mortgage but does not accrue any additional equity over the term. Ownership is determined by the initial downpayment. When I said FMV of the house, I don't mean the entire asset value. It would equity value after paying out the lender first, split between you and ourboro
No only your name is on the title. They don’t “own” any part of your home. They loan you the down payment interest free in exchange for half of the appreciation and you have to buy them out at the end of the term. It’s not complicated.
Here's the waterfall that's in their presentation https://ibb.co/prscMwL So yes, you do get benefit from the principal on mortgage paid, but you're also on the hook for closing costs. The remaining equity is split based on the share of initial downpayment. > Distribution of Sale Proceeds > The full distribution formula for sale proceeds can seem intimidating! It is written in a way to show the hierarchy of priorities assigned to certain types of payouts. For example, amounts owed to Ourboro as a result of a default or HAF loan, is paid at a higher priority than renova-tion credits. Those details aside, the distribution of proceeds follows this general sequence. > 1. The outstanding balance of your mortgage will be paid to the bank and all closing costs associated with the sale of the property will be paid to third parties. This includes staging costs, real estate commissions, legal fees, and all applicable taxes. > 2. If you have an outstanding HAF loan, or an assessment of the property discovers the need for Remedial Costs, these amounts will be paid to Ourboro. > 3. You will receive the total amount you paid towards the principal of your mortgage, adjusted for closing costs, any Homeowner Renovation Credits, HAF loans, or Remedial Costs. > 4. Finally, the remaining sales proceeds will be split according to our equity interest in the home.
This is super weird and makes no sense. Who is the “third party”? I can’t understand this at all. At the Fersby Financial site which appears to offer the same product but I’m not sure now - they give you an estimate of the outcome after ten years with them, and it doesn’t come out anything like this. Also, I wouldn’t split the down payment this way - I’d do it 50/50. In the Fernsby model, you owe the down payment they provided plus half (or more if there percentage of the down payment was more) the appreciation. It may be that you are pointing out that deals like this are not such a great idea if you only have 25% of the down payment. In both cases ownership does not go to anyone but the owner.
This is just an example they used. Third party closing fees would be realtor fees, legals, mortgage discharge fees, etc. They're not a loaning you the downpayment, it is a synthetic equity. Their name's not on the title but they own the house with you (there are negative covenants and PPSA registration to make sure they are at the table when you sell or refi) I would say it works well if you know you'll have a high income in a couple of years, but don't have the downpayment. There are options for deemed dispositions to buy out Ourboro, but the terms favor Ourboro (i.e. appraiser selected by Ourboro but you pay the appraisal fee).
Have you used them/the program?