Turn Home Equity into Retirement Income

Equity Access for Retirement Income

For most Americans, the single largest asset at retirement is their home equity. The typical American household has 70% of their net worth in home equity. While that’s not unexpected, the concentration of equity is alarming for homeowners and our society.

EquiFi has incorporated several possible income options to consider in conjunction with your wealth advisor. Income options include immediate or deferred fixed income annuities, variable annuitization or any combinations of these products, along with a personal systematic withdrawal income plan (PSWIP). Using an integrated plan which combines one or more insurance components into the program guarantees, you’ll receive back at least the amount of home equity contributed. Because most annuities carry a minimum guaranteed rate of return, you may receive more than you contributed.

You don’t have to sell your home to access your equity. Designed to help supplement your income from Social Security and retirement plans, the EquiFi Funding Instrument (EFI™) paves the way for converting some portion of home equity into income. The lump sum you receive from EquiFi can be invested to generate income or you might be interested in “insured income”. This is when an insurance company takes the lump sum and gives you back a guaranteed monthly income for life.

What is the EFI™?

The EFI™ is an equity investment in an owner-occupied home where an investor advances cash to a homeowner equal to a percentage of the current fair market value of the home.  In return, the EquiFi investor will share in a percentage of the future equity in the home at a terminating event.

Because the EFI™ is equity financing, it’s very different than debt financing in the following ways:

1. The investor can, in some circumstances, lose principal on the EFI™ as they are not entirely protected from falling home values.
2. The investor does not go on the property title but has protection through a lien placed on the property. The lien position is primary unless a 1st mortgage lien is in place already in which case the lien is in second position.
3. The cost to the homeowner is not defined in accrued or current interest (it’s not debt), but rather in a shared percentage of the home’s future value.
4. The term of the EFI™ is not defined by time (years) but rather by events.  These events are typically the sale of the home, the death of the homeowner(s) or the pre-payment by the homeowner.
5. The EFI™ is not a loan, it is not debt, and therefore you do’t have to make any monthly payments to us during the term of the EFI.

Contact your wealth advisor to create a customized plan for your needs.