Alternatives to Reverse Mortgages

Forward options on the future appreciation of real estate is an upscale alternative to reverse mortgages. EquityKey, the provider, purchases an option on 50% of the future appreciation of real estate for between 10% and 15% of the present value of the property. If a property is worth $1,000,000 today, EquityKey will pay one owner between $100,000 and $150,000 today in exchange for 50% of the future appreciation at the time of settlement. If the property goes to $1,500,000 in that time, EquityKey will either pay the estate $1,250,000 or the estate, or, in the case of a sale, the client, will pay EquityKey $250,000. The current equity is not effected, unlike with a reverse mortgage.

EquityKey Features:

• Pays between 10%-15% of present value of real estate
• There can be two options on a property if there is more than one qualifying client.
• Is not a lien, so current financing at 70% or lower can remain
• Can be any type of real estate: second home, investment property,commercial property, raw land
• No cost if turned down by EquityKey of if the option offer is accepted. (There is a $300 good-faith deposit that is forfeit if an offer is made and rejected.) EquityKey pays for all costs, including two appraisals to determine Fair Maket Value
• Option can be transferred to other property in the event of sale
• Only client has to meet requirements: Must be 65-85 and in insurable health.
• For more information on EquityKey go here:

While funding for this program has been temporarily suspended by KBC, one of the top European banks, which owns 100% of EquityKey, the company is continuing to expand its operations to take new applications.

Before the credit crunch, there were a host of alternatives to HECM (Home Equity Coversion Mortgages) reverse mortgages, but the credit crunch has curtailed the availability of every alternative to the government sponsored programs. As liquidity in the financial markets eases, these programs will be back.