Mortgage Alternative (MA) matches qualifying MA home buying and occupying customers to new and existing homes/units/townhouses of their choice as purchasers under a ten year lease from Assquire® investors. See here for What is Assquire®
An Assquire® investor may have already acquired a property from a builder/developer or from a real estate agent. They could even be a landlord who has become licensed to use the patented Assquire® system because they want the much higher net yield on their investment property, compared to conventional rental income.
Once a customer has been matched to a home, an Assquire® investor will acquire (or in some cases already own) the property. The customer then enters into an MA contract to purchase the home from the Assquire® investor at a pre- agreed fixed price, with settlement to occur at the MA customer’s choice at any time within the settlement period of up to ten years. An MA buyer occupies the home immediately following the exchange of MA contracts and purchase of the home by the Assquire® investor.
Upon moving into the new home, there is a monthly payment to the Assquire® investor, not dissimilar in size to a monthly mortgage repayment plus the usual associated ownership costs such as rates, maintenance, insurance, etc. This monthly payment includes a contribution (approximately 5% of the monthly payment) to a deposit account held in the MA buyer’s name that increases their equity over time. The monthly payment also covers fund investor returns, rates, reasonable body corporate fees, home insurance and maintenance.
Under the terms of the Purchase Contract, customers have the ability to settle the purchase of the home at any time prior to the end of the contract settlement period, which is ten years.
For existing home owners with a mortgage, and looking to trade up, the results of using Mortgage Alternative are dramatic.
As you will see in example 3 below (a $trade up to a $750,000 home), Tom and Jenny would ordinarily be up for a further $29,240 in NSW stamp duty and lenders mortgage insurance of a further $28,373 (of which $15,000 may ordinarily be capitalised by the lender to their mortgage at their new residence). This is all on top of the deposit requirement.
With Mortgage Alternative, there are no such additional upfront costs; only the deposit. In many cases (as with Tom and Jenny), they can now actually move residence.