Homeholding 101

Homeholding 101: What You Need to Know Now

‍

In a perfect world, homeowners would never have to worry about falling behind on their mortgage payments or facing foreclosure. But the reality is that unforeseen circumstances can sometimes lead to financial hardship. If you find yourself in this situation, you may be wondering what your options are. One option that you may not have heard of is homeholding.

What is Homeholding?

Homeholding is a unique and innovative approach to helping homeowners avoid foreclosure. Here's how it works:

A homeholding company, purchases your home for a fair price.
You then lease the home back from the company for a predetermined period, typically 1-3 years.
During the lease period, you have the option to repurchase your home at the original purchase price, plus a predetermined fee.

What are the Benefits of Homeholding?

There are many benefits to choosing homeholding over traditional foreclosure alternatives, such as short sales or deed-in-lieu of foreclosure. These include:

Immediate cash relief: Homeholding provides you with immediate cash to help you catch up on missed payments and other financial obligations.
You can stay in your home: Unlike a short sale or deed-in-lieu, homeholding allows you to remain in your home during the lease period. This can help you avoid the stress and disruption of moving.
Time to get back on your feet: The lease period gives you time to develop a plan to improve your financial situation. This could include increasing your income, reducing your expenses, or building up your savings.
The opportunity to repurchase your home: One of the biggest benefits of homeholding is the option to repurchase your home at the end of the lease period. This gives you a chance to regain ownership of your home if you are able to get back on your financial feet.

Is Homeholding Right for Me?

Homeholding is not a one-size-fits-all solution. It is important to carefully consider your individual circumstances before making a decision. Here are some things to think about:

Your financial situation: Can you afford the monthly lease payments? Do you have a plan for repurchasing your home at the end of the lease period?
Your goals: What are your long-term goals for your homeownership? Do you want to keep your home long-term, or are you open to selling it eventually?
Your personal situation: Are you comfortable living in your home while someone else owns it? Are you prepared to make the effort to improve your financial situation during the lease period?

If you are considering homeholding, it is important to talk to a qualified financial advisor or counselor. They can help you assess your individual situation and determine if homeholding is the right option for you.

Here are Some Additional Things to Keep in Mind:

Homeholding is not a get-rich-quick scheme. It is a serious financial decision that should be made carefully.
Be sure to read all of the contracts and paperwork carefully before signing anything.
There are fees associated with homeholding, such as the lease payment and the repurchase fee. Be sure to factor these costs into your decision.

Homeholding can be a valuable tool for homeowners who are facing foreclosure. If you are in this situation, it is important to weigh your options carefully and make the decision that is right for you.