Annual Inflation Premium
Greater of 2.5% or CPI annual increase of funding amount
Generating liquidity from your equity, while also retaining the right to use the asset.
Ex: “Sell and Stay” pays homeowners a lump sum of cash and mortgage payments, but still gives them the right to rent, repurchase, and sell their homes as stated in.
EasyKnock’s initial payment (includes paying off mortgage balance).
Loan To Value (LTV)
A financial ratio expressing the proportion of borrowed money to the value of the purchased asset
Ex: If a home with a $200,000 market value has a $50,000 mortgage balance, the LTV ratio is 25%.
The full amount owed by a homeowner at a period of time, including remaining principal owed, accrued interest (also referred to as the outstanding principal balance or OPB)
In finance, an option is effectively a contract allowing an entity the right to buy or sell an asset at a predetermined price on a specific date. The entity, however, is under no obligation to exercise the option.
Ex: In a “Sell and Stay” agreement, homeowners are given a “Lease Termination Option” giving them the right to rent, repurchase, or sell their home.
Funding amount + inflation premium
An arrangement involving the sale of an asset, wherein the seller leases the asset from the purchaser after the sale is complete
Ex: In a “Sell and Stay” agreement, the homeowner is the seller, and EasyKnock is the purchaser.
Successor purchase price – repurchase price – closing costs (remainder of equity after fees).