- Jul 24, 2023
- Jun 15, 2023
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An Affordable Mortgage
Just when you need most
With households facing the worst housing affordability crisis in history, a $3 trillion market is ready for a better solution.
Contigo Capital's new mortgage gives homebuyers the market's most affordable terms, while significantly minimizing risk for lenders.
Problem
The Problem
The Worst Housing Affordability Crisis in History
All-time high housing prices and rising mortgage rates have created impossible conditions for homebuyers:
73%
of potential homeowners name affordability as a primary obstacle
65%
Average year-over-year increase in monthly mortgage payments
90%
Decrease in industry-wide mortgage origination volume
At the Root of the Problem
Households are the weakest link in homeownership: highly leveraged, extremely fragile, and susceptible to financial hardship.
High leverage leads to high default risk
Households are deeply leveraged and exposed to real estate price fluctuations, risking their equity.
High default risk leads to affordability barriers
Lenders, anticipating potential defaults, safeguard their capital by creating affordability barriers for potential homebuyers:
Large down payments
High rates
& fees
100% amortization
41%
of homebuyers' monthly income is required for a mortgage
The Solution
Product
Introducing the Risk-Transfer Mortgage™
The Key to the RTM™
50%
of priced-out households can be returned to the affordability circle
As home value rises and falls, the loan’s remaining principal adjusts accordingly, so borrower and lender share both upside and downside.
Borrowers choose how much home value they share
Lendees have total flexibility to design their ideal financing strategy and tailor it to fit any budget and spending approach.
Enhanced real-estate buying power
The RTM™ introduces a transformative 20% increase in affordability for potential homebuyers.
Downside protection
>30% lower monthly payments
≤90% LTV
No PMI
The Risk-Transfer Mortgage™ (RTM™) is a new, more affordable mortgage with a simple yet innovative concept: the loan principal is linked to the value of the home.
How It Works
How It Works
The Fair Approach to Home Financing
Because the Risk-Transfer Mortgage™ is tied to the home value, the borrower and lender share the risk and the reward of real estate.
In a traditional mortgage, the lenders maintain the senior claim.
Their need to protect capital leads to unfavorable loan terms and other affordability barriers for borrowers.
A traditional mortgage creates highly leveraged borrowers
More leverage means higher default risk and more rigid loan terms
In the RTM™, the borrower and the lender share both risk and reward.
This decreases leverage, lowers default risk, and enables unparalleled loan terms.
The Risk-Transfer Mortgage™ trades leverage for better terms
Lower leverage means lower default risk and improved loan terms
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