How do you determine how much equity you can unlock from the departing property?
We typically shoot for an approval that allows us to lend up to ~75% CLTV of the departing residence. For example, if the client’s home is worth $1,000,000 and the mortgage balance is $500,0000, we can potentially provide up to $250,000 to use towards the down payment on the next property.
How is the departing property value determined?
The primary factors that influence our valuation is the listing agent’s valuation and our team’s expected sales price. Our model also utilizes publicly-available market data including comps and risk factors which slightly adjust the final number.
How and when will my client access the equity?
We wire the funds directly to the purchase escrow account 1-2 days beforehand, or first thing in the morning on the day of the purchase closing.
How do you determine the purchase price in the backup offer?
The purchase price on our back up offer will mirror the agent’s valuation; however, we purchase the home at the “Loan Payoff Value” which is the sum of the outstanding mortgage and the Equity Unlock funds the borrower is using. We put a seller credit in the contract for the difference between the valuation/sales price & the Loan Payoff Value/”real” purchase price.