Shared equity loans involves two parties. There are two types of shared equity loans: either a loan or an agreement. Let us explain.
The loan involves two parties, and one party makes an entire or partial payment on the down, including any necessary costs, and then makes the monthly payments. In return, this person gets a certain percentage of ownership in the house, and gets some interest and property taxes paid for.
The agreement also involves two parties, but it is a little bit more technical. This agreement is attached to already existing mortgage loan. Both parties decide what the contract will state, such as percentage of ownership for each party, who pays what and when, etc. Home mortgage loan rates are also included in these agreements. These agreements also list a price that both parties agree on in case either party wishes to buy the house.
About the FHA
FHA Loans, Con’t
Rent to Buy
Learning Center Home
Reference text: Mortgage Loans: What’s Right for You?, by James E. Bridges with Deborah J. Bridges. Copyright 1989, Published by Betterway Publications, Inc., Crozet, VA