Let’s look at an example from the Homeowner’s perspective. Assume they originally purchased a $230,000 home that is now worth $200,000. When they initially purchased, they put $40,000 down. Their note has just adjusted up from 8.5% to 10%, so their P&I payment has just risen from $1,461 to $1,667. They can no longer afford the payment and, with the current market, selling the home is not an option. They are a foreclosure waiting to happen with traditional financing tools.

If they refinance into Term Ownership, though, their monthly P&I payment would drop from $1,667 to $1,008 per month, a nearly 40% drop. Their home is, once again, affordable. Over the course of 5 years, assuming the rate in their note would remain constant, the homeowner would save about $39,500 in payments.

But this affordability does not come without cost.  At the end of the term, if they do not choose to buyout the investor or to re-purchase a term, the Term Owner will lose the property as it passes to the Investor as a matter of law!