siesing

siesing | Joined since 2018-04-17

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2018-11-06 04:45 | Report Abuse

It will be very strange if FundMyHome actually allows the home to be refinanced through itself at the end of year 5. If they do so, they will immediately incur a loss of 20% of the value of the home. Where did you get the info that they will actually allow that?

You can imagine the transaction to be as follows:
1. The homes are initially sold at 20% discount through bulk purchase by the FundMyHome investors.
2. The homes are later resold to buyers at 100% of the original price.
3. FundMyHome which holds the 20% difference, pays it out slowly to the investors over 5 years.

The 20% discount from the developer is used to pay out the 5% return to the investors.
If FundMyHome allows the buyer to refinance their home back to FundMyHome, someone will have to fork out another 20% to be paid to the next batch of investors. I sure hope it won't be the home buyers.