Steadworth's Home Wealth Share Program provides flexibility for homeowners who may need to sell or refinance their home during the contract term. However, it's important to understand the process, requirements, and how these actions impact your Wealth Share.
Selling Your Home
If you decide to sell your home before the end of your Home Wealth Share Agreement term, you are free to do so. However, you must follow specific steps and comply with certain conditions:
Notify Steadworth: You must promptly notify Steadworth in writing of your intent to sell the property, providing details about the proposed sale, including the listing price and any offers received.
Arm's Length Transaction: The sale must be an arm's length transaction, meaning it is conducted at fair market value and without any conflicts of interest.
Appraisal: Steadworth may require a final appraisal of the property, at the homeowner's cost, to confirm its fair market value for calculating the Wealth Share Proceeds.
Closing Process: The sale must be completed through a qualified and reputable closing agent, such as a title company or attorney. Steadworth will provide instructions to the closing agent regarding the distribution of proceeds.
Payment of Steadworth Proceeds: Upon closing, Steadworth will receive its original investment amount plus its share of the home's appreciation, as outlined in your Plan Agreement. You will receive the remaining proceeds after deducting any applicable fees and costs.
Refinancing Your Home
If you wish to refinance your mortgage during the contract term, you must obtain Steadworth's prior written consent. There are two main types of refinancing:
Rate-and-Term Refinance: This type of refinance involves replacing your existing mortgage with a new one that has a lower interest rate or different loan term. If you are not taking any cash out from the refinance, Steadworth will typically approve this type of refinance with a limited approval process.
Cash-Out Refinance: This type of refinance involves taking out a new mortgage for more than your current outstanding balance, allowing you to access cash from your home equity. Cash-out refinances require a termination of your Steadworth Plan Agreement and payment of all amounts due under the Plan Agreement, including Steadworth's original investment and its share of the appreciation.
Impact on Wealth Share
Selling or refinancing your home before the end of the contract term may impact your Wealth Share. If the transaction occurs within the first five years of the agreement, your Wealth Share percentage will be reduced, with a corresponding increase in Steadworth's share. This is because Steadworth incurs upfront costs and underwrites for a certain level of appreciation when investing in your home, and a longer investment period allows for greater potential appreciation.
It is crucial to carefully review the terms of your Home Wealth Share Agreement to understand the specific conditions and potential adjustments to your Wealth Share in case of an early sale or refinance. If you have any questions or are considering selling or refinancing your home, contact Steadworth's team for guidance and to ensure compliance with the Plan Agreement.