Another Update: I'm looking at a different option, now. There's a finance company called "Point." Apparently, what they do is almost like a Reverse Mortgage (they call it a HEI - Home Equity Investment). You get to borrow a certain amount, based on the appraised value of your property. You do not have to make monthly payments on the loan, but the loan is settled at the time you decide to sell the property or your executor sells it. The contract is for 30 years, unless you decide to re-negotiate it at that time (at which point, the property is re-appraised). You can also elect to buy out the contract sooner. Whenever you do decide to terminate the contract (either by selling the house, refinancing with HELOC, or paying cash), they re-appraise the property. They then take a certain percentage (20-30%) of that revised appraisal as "their share" of the equity (representing all the interest they would have charged for the loan if it were a regular mortgage), as well as the original principal they lent you. You then get the proceeds after closing.
Example: Say your property initially appraises at $300K. They adjust it down slightly by 15% (down to $261,000.00) to account for a potential decrease in the value (if it goes below that, you don't pay more of a share). This adjusted value determines what principal they'll offer you. You receive that amount. You don't make monthly payments on that amount.
When you get ready to sell the property (or buy out the contract), they re-appraise the property (say it's up to $350K). At the time of closing (or buyout), you pay the original principal back plus "their share" of the re-appraised value (about 20%). Therefore, if you borrow $30K, you'd pay them that plus 20% of $350,000.00 (about $70K + 30K (principal)) = $100K. You'd then get $250K at the time of closing. Of course, if the property decreases in value over that time, then "their share" is a lot less.
I'm still thinking it over. I really don't like putting the equity in my property at risk, but I gotta get my roof replaced, so.... Since I don't make payments during the life of the contract (there actually is no way to do that), what I *can* do is pay myself those payments into a savings account or something and have enough to pay off the principal + "their share" by the time I'm ready to buy them out (10yrs, I think). I can calculate that monthly payment before I sign the contract, It should be doable in 10 years, which is as long as I'd want it to be (I'd be in my 70's by then and not sure if Social Security will still be there).
Anyway, thoughts?
And I promise I'll start my 2nd build soon, after the new roof gets on.
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