About lender
Balance Homes Inc. is a financial firm that was established in 2021 in California, USA. It offers borrowers an alternative to borrowing money and mortgaging their homes by providing financing options that are more flexible, affordable, and open to a broader range of applicants.
It is a new solution to the problem of underserved homeowners and those whose large financial institutions get rejected. It was designed for people who are having trouble affording homeownership, who are in forbearance, or who are facing foreclosure. Balance allows homeowners to tap into their current home equity to pay off their entire mortgage and any other outstanding debts and receive up to $50,000 in cash.
Pros and cons
Pros
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Low monthly payments
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Flexible qualifying criteria
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Funds up to $50,000 in cash
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Help underserved homeowners.
Cons
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No transparent fees and rates on the website
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Not available in all locations
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There are service fees and closing costs
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There is an ownership entry fee.
Terms and conditions
The specifics of Balance's rates and fees are not disclosed on the company's website. Paying service fees and closing costs is your responsibility. In most cases, customers of Balance pay nothing at closing since they can use a portion of their home equity to cover all closing costs. You'll pay a one-time fee of 2.5% of the value of your house to join Balance's shared ownership program. This one-time charge can be paid with the equity in a home, allowing homeowners to work with Balance without having to pay any money to Balance at closing.
Your home's monthly operating expenses will be split equally between Balance and you as a co-investor. There is no time limit. You have the option to raise your stake at any moment. Balance has a maximum length of 10 years and is customarily reimbursed when you sell the house, pay off the balance, and switch to a standard mortgage. More equity in your home means cheaper monthly payments.
You can use a mortgage to pay down the balance at any time. You can sell your home and keep half of the profits and any home appreciation. A soft draw of your credit report is all required to get a proposal, and it does not affect your credit score.
Funding an investment
Even if you have an adverse credit score, you may prevent foreclosure and take control of your expenses with a customizable co-ownership scheme that Balance has developed to match your needs.
If you agree to give up the sole ownership of your house, Balance will pay off your mortgage and up to $50,000 in other debts, allowing you to regain financial stability. As a co-owner, Balance contributes to the home's insurance, taxes, and maintenance costs, as well as the home's future appreciation. Based on the percentage of your house that you share equity with Balance, you'll be charged a predetermined monthly price for your home use. You can buy back equity at any moment to increase your ownership percentage and lower your monthly charge.
