Frequently asked questions
What is an Aspire HEI agreement and how does it work?
- An Aspire HEI agreement provides you with a cash payment today in exchange for an option to share in a portion of the future change in value of your home.
- At the end of the agreement, if your home has gone up in value, Aspire will receive its share of that increase in value. If the value of the home goes down, Aspire will receive less.
- You retain complete control of your home and can end the agreement at any time – typically through the sale of the home or a buyout of the agreement.
How does Aspire determine the value of my home?
- At the outset of the agreement, Aspire will determine a starting property value for your home based on 3rd party valuation. The starting property value includes a 15% risk adjustment to the appraised value.
- At the end of the agreement – up to 30 years after the agreement is signed – the value of your home is determined by the sale price or, if you buy out the agreement, by an independent 3rd party appraised value.
How much money can I get from Aspire?
- Aspire can provide you with up to 15% of the appraised value of your home, depending on your home value and other qualifying criteria. We require a minimum investment amount of $35k and a maximum amount of $250K.
How do I qualify for an Aspire HEI agreement?
- Some of the requirements which you must meet to qualify for an Aspire HEI agreement include:
- Your property must be included in an eligible location. You can see if your home’s location is eligible by entering your address into our address check tool. We are currently working with homeowners in approved areas of the following states: California and Colorado.
- You must live in the property. Vacation/second homes are eligible. Investment properties are not eligible at this time.
- Single-family residences, condominiums, and townhomes are eligible. Multi-family residential properties (1-4 units) are eligible.
- You must have owned the home for at least 12 months.
- You cannot have an active Reverse Mortgage, Shared Appreciation Mortgage, or HEI agreement on the property.
- All applicants must be U.S citizens or lawful permanent residents and must provide proof of identity.
- You and all co-applicants must have a credit score of at least 660.
- You must have at least 30% equity in the home (70% LOTV – Loan-plus-Option to Value ratio – including the cash payment to you for the HEI agreement and all existing mortgages, HELOCs and other liens on the property)
- You must have a Debt-to-Income ratio of 50% or below. If verified DTI is greater than 50%, we may allow you to pay off debt with HEI proceeds at closing to get within the accepted range.
- You must not have experienced a bankruptcy within the last 3 years or a property foreclosure within the last 5 years.
Do I have to pay out-of-pocket for fees and related origination costs?
- There are no out-of-pocket fees. Aspire will deduct a 3% processing fee and other 3rd party related costs from your funding amount, prior to the funds being wired to your account. 3rd party related costs may include things like the appraisal, title and escrow, and government taxes/fees.
What does the application and funding process look like?
- The entire process, from application to funding, can take as little as 2 weeks, and consists of the following steps:
- Enter your address into our online form to instantly see if your home is in an eligible location.
- If your home is eligible, you’ll need to complete a short online application. It generally takes less than 10 minutes to complete and asks for information about you and your home. When you submit the application, you are agreeing to allow Aspire to make a credit inquiry. We will check your credit report to confirm you meet our credit score and other eligibility requirements.
- We’ll review your application and let you know if you are eligible for an Aspire HEI agreement based on the information you provided. If you are eligible, we’ll ask you to create an account and provide us with a few documents we’ll need to continue processing your HEI agreement application. Some of the documents we may ask for include:
- Most recent mortgage statement if you have an existing mortgage on the property
- Proof of identity
- Income verification
- Evidence of Homeowners/Hazard Insurance
- In some cases, we will need to work with you to schedule an in-person appraisal of your property to determine your home’s value.
- After a complete review of all required applicant- and property-related information, we’ll provide you with an offer package reflecting the amount of cash we can provide to you in exchange for a share in the future change in value of the property. This offer package will also contain more information about how the program works and estimated closing costs.
- If you accept the offer, we’ll work with you to schedule a closing date, at which you’ll sign the agreement. Four business days after signing, we’ll wire the funds directly into your account.
What happens when I sell my home?
- You can sell your home at any time, and it will trigger the termination of our agreement. When you sell your home, Aspire will receive the amount originally given to you at the beginning of the agreement, plus or minus its agreed-upon share of the home’s change in value.
Can I end the agreement at any time without selling my home? Are there any penalties?
- You can end the agreement at any time by buying out the agreement. If you elect to buy out the agreement, Aspire will work with you to establish a 3rd party appraised value of your property. This appraised value will be used to determine Aspire’s share of the change in value. Some homeowners will use a cash-out refinance mortgage or a HELOC to facilitate the buyout of the Aspire HEI agreement.
- There are no penalties associated with buying out your agreement, but there may be fees and costs associated with the closing.
How is Aspire’s share at the end of the agreement calculated?
- Aspire’s share % at the end of the agreement is based on the amount you access at the start, which we call the “Initial Cash Payment.” We take your Initial Cash Payment (expressed as a percentage of your home’s appraised value) and multiply it by an “Investor Multiple”. The Investor Multiple starts at 3.0 in Year 1, increases to 3.75 in year 4, and increases to a maximum of 4.50 in year 6. For example, $50k accessed on a home with an appraised value of $500k equals 10%. 10% multiplied by an Investor Multiple of 3.75 (if the agreement ended in year 5) equates to an Aspire share of 37.5% of the property’s change in value from the agreed-upon Starting Property Value. (Don’t forget, the Starting Property Value is the home’s appraised value at the start of the agreement with a 15% risk adjustment.)
- When you buy out or otherwise settle the HEI agreement with Aspire, we receive an amount equal to the Initial Cash Payment plus or minus our share of the property’s change in value from the agreed-upon Starting Property Value.
- Additionally, to provide you with protection, the amount due to Aspire is limited to a maximum annual return of 12% in the first 3 years and 18% thereafter (compounded monthly).
Is Aspire added to the title of my property?
- Aspire is not added to the title of your property. You will retain ownership of your home with Aspire as an investor and lienholder. Similar to a mortgage loan or a HELOC, Aspire will secure its interest by recording a lien on your property.
Why would I consider an Aspire agreement to access my home equity over a HELOC?
- Unlike a HELOC, which requires monthly payments and interest, an Aspire HEI agreement has no monthly payments or interest. The cash provided to the homeowner at the beginning of the agreement is paid back only at the end of the agreement, up to 30 years after being signed, plus or minus Aspire’s share of the property’s change in value. Additionally, HELOCS often have high interest rates and strict income qualification requirements, and they have to be repaid no matter what happens to your home’s value.
Can I refinance my home in the future if I have an Aspire agreement?
- There is nothing about the Aspire agreement that prevents a lender from refinancing your mortgage with an Aspire agreement attached to it. Before refinancing, you’ll need to get our approval; because we are a lienholder, the refinancing lender will need to coordinate with us during the refinance process.
Who is Redwood Trust?
- Redwood Trust is the owner of the Aspire home equity investment platform and the parent company of RWT Home Options, Inc., Aspire HEI, Inc., Aspire RWT, LLC, and Aspire 3P, LLC, which are the subsidiaries that provide and administer Aspire HEI agreements. Redwood Trust, a publicly traded REIT (NYSE: RWT), has been expanding access to housing opportunities for American homeowners, homebuyers and renters alike since 1994. Redwood Trust is proud of the number of families who have been able to purchase, finance, or rent quality homes – with a sense of wellbeing and security – because Redwood Trust has been there.
Can I rent out my home if I have an Aspire agreement?
- Since Aspire only works with owner-occupied homes, at this time, renting out your home with the agreement in place would violate the terms of the agreement. We suggest homeowners buy out the agreement if they decide to rent out their property.
What happens if I remodel my home, does Aspire share in the increased value stemming from the remodel?
- If you remodel your home while the agreement is in place, Aspire may be able to give you credit at the end of the agreement for any increase in appraised value stemming from the remodel. We call this a Remodeling Adjustment, and it’s described in more detail in the HEI agreement.
- Homeowners can only apply for a Remodeling Adjustment after the first 2 years of the agreement, but the remodeling work can be completed at any time. In order to be eligible for a Remodeling Adjustment, the homeowner must provide us with proper documentation, permits, and other items specified in the agreement.
- For qualifying remodels, Aspire will work with a 3rd party appraiser to determine the value added and give you a Remodeling Adjustment at agreement termination.
Who is responsible for paying property taxes, insurance and other home maintenance costs?
- You remain the owner of your home and are responsible for keeping the property in good condition, paying your mortgage(s), property taxes, insurance, and any other obligations as the homeowner.
What happens if the homeowner passes away?
- If the last surviving homeowner listed on the option agreement passes away while the agreement is in place, the agreement will pass on to the homeowner’s successors/heirs inheriting the property. Our lien will remain in place and the successors/heirs will continue to be bound by the agreement until termination.
Is my property eligible if it’s held in a trust?
- Qualified properties held in a Revocable Trust are eligible for an Aspire HEI. Trust related documents may be required during the origination process. Irrevocable Trusts are not eligible for an Aspire agreement.
Are there any Income or Employment requirements?
- There are no specific employment requirements to qualify for an Aspire agreement, but homeowner(s) cannot have a Debt-to-Income ratio in excess of 50%. Qualifying applicant income sources include: self-employment, social security, pension, and rental income.
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