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EquiFiWhat is an EFI

What is an EFI™?

The EFI™ is a debt-free equity investment in a home.  There’s no monthly payment associated with the EFI, instead, the homeowner shares a portion of the home equity at the end of the contract. The EFI also has no predefined term. Typically, the EFI terminates when the home is sold or at the death of the homeowner.

 

The only product of its kind with no specific term in years!

Terminating events are most frequently the sale of the home, death of the homeowner(s), or a penalty-free early termination option. You’re responsible for paying your mortgage (if you have one) your property taxes, and your homeowner’s insurance policy, as well as maintaining your home. As long as you do that, you can stay in your home as long as you wish.

How the EquiFi Funding Instrument (EFI™) works

We provide you money you need now in exchange for a share of your future home equity. If you have an abundance of home equity, we’ll carve out a portion that you won’t share with us. We call it Protected Equity and we only share in the equity that remains after you’ve received your Protected Equity.

EquiFi customer profile – example

Current Home Value

$1,000,000

based on a current appraisal

EquiFi Provides

$100,000

10% of the current home value

EquiFi’s Share

13.5%*

of the Net Home Equity

The home in this example has a pre-existing mortgage balance of $200,000.

EquiFi can provide up to 45% of the home value to eligible homeowners.

*Sharing percentage shown is an example. Contact us with your home details to discuss available options.

If this example EFI is paid back after 8 years:

Steady Appreciation
(4% for 8 years)

Higher Appreciation
(7% for 8 years)

Drop in Home Value
(-3% for 8 years)

Future Home Value
$1,368,569

Future Home Value
$1,718,186

Future Home Value
$783,743

Homeowner Share
$1,059,380

Homeowner Share
$1,361,799

Homeowner Share
$553,506

EquiFi Share
$202,909

EquiFi Share
$250,107

EquiFi Share
$123,957

Mortgage Balance
$106,280

Mortgage Balance
$106,280

Mortgage Balance
$106,280

 

Equity vs. Debt

We recommend consumers understand the differences between debt and equity financing, and consult with professionals that may be able to provide guidance that would be helpful in evaluating all options. The table below is a general comparison between different forms of debt and equity.

Home Equity Loan

EFI

Reverse Mortgage
  • Debt-based
  • Monthly payment required
  • Must be repaid by end of term
  • Commonly repaid through adjustable rates, which may increase
  • Equity-based
  • No monthly payment
  • Predictable costs
  • No repayment schedule or deadline
  • May offer tax advantages (consult your tax advisor)
  • Debt-based with accrued and compounded interest
  • Generally repaid with a variable interest rate
  • May impose a burden on estates
  • High insurance costs up to 2% of the home value