Mortgage Alternative matches home-buyers with the new home of their choice.
This home is owned by an Assquire® investor which is either a landlord or into 2016 will likely include a real estate investment trust, supported by major Australian financial institutions and superannuation funds that have had the opportunity (via Haigslea Residential’s role) to assess your credit profile and suitability of your preferred home (the Assquire® investor’s investment property).
HRL also assess its suitability for investment or a Fund’s property portfolio and as your home to occupy now as Buyer and tenant simultaneously. The Assquire investor (a personal investor or a Fund that pools properties) buys the property first on conventional terms from the vendor.
MA buyers then enter into an Assquire® Purchase Contract on the home with the Assquire investor or Fund, with settlement to occur with the Assquire® investor or Fund in up to ten years, at a time of your choosing.
You move into the home immediately and pay a higher monthly payment than conventional rent (because you are securing most of the future capital growth when and if you settle). That monthly payment, under a ten year contract, is roughly the same each month as the costs of ownership under a standard 25 year mortgage (inclusive of property ownership costs). This monthly payment is designed to cover a return for investors (individually or in the MA licensed Fund), rates or reasonable body corporate fees, insurance, maintenance and a contribution (around 5% of your monthly payment) to a savings plan/deposit account held in your name that builds up your equity over time.
The arrangement is structured so that, assuming reasonable property price growth going forward, when your contract is due to settle, you should have built up enough equity in the home (through capital gain, your initial deposit and your equity contributions and embedded savings plan over the contract period) to purchase/”re-finance” the property with a standard mortgage – in many cases if not all without mortgage insurance.
Mortgage Alternative effectively acts like a mortgage incubator alternative purchasing system, where customers are able to access the benefits of home ownership NOW, and lock a pre-agreed price for ten years rather than waiting years to save a deposit of 10-15% or more and then still paying mortgage insurance.
To learn more about the details around how Mortgage Alternative works, please click HERE.