The REX Agreement is an innovative financial product that gives homeowners like you a smart new way to unlock a portion of your home equity without incurring any additional debt.
Please note that the provider of the REX Agreement, FirstREX, is not a mortgage lender and the REX Agreement is not a loan or a form of credit. However, FirstREX and the REX Agreement are subject to certain state and federal laws and regulations. On the federal level, FirstREX is subject to the federal Fair Credit Reporting Act, the Federal Trade Commission Act, and the privacy provisions of the Gramm-Leach-Bliley Act, among others. However, since FirstREX is not a lender or a bank, nor is the REX Agreement a loan, federal and state mortgage and banking institution licensing or approval requirements do not apply to FirstREX. Federal regulations which apply to lenders and banks, such as the Truth-In-Lending Act and the Real Estate Settlement Procedures Act, and their state law counterparts, likewise do not directly apply, but, recognizing the importance of the consumer safeguards contained in these regulations, FirstREX has selectively imported many of the most critical consumer safeguards concepts into its product and processes. In those states in which FirstREX operates and which such state law requires a qualification or regulatory approval to offer the REX Agreement, FirstREX is so registered or qualified with the appropriate approval agency.
Note, importantly, that there are other ways to convert your home equity to cash, including refinancing your mortgage, getting a home equity line of credit, getting a reverse mortgage, or selling your home. You should consider all of your choices before making a decision.
We cannot overemphasize the importance of having a full understanding of the features of the REX Agreement before entering into a REX Agreement. You are urged to carefully review the REX Agreement Product Guide, REX Agreement Important Information Notice and other REX Agreement disclosures, and the REX Agreement legal documents and other materials before entering into a REX Agreement. These documents and materials will be given to you during the REX Agreement application process. You are also strongly urged to review them with your legal, tax and financial advisors, and family members, before deciding if a REX Agreement is right for you, and in order to fully understand the following:
- Your responsibilities under the REX Agreement
- The cost of obtaining a REX Agreement
- What will happen when you decide to sell your home or otherwise end your REX Agreement
- The rights your REX Agreement gives you
- The rights your REX Agreement gives FirstREX
- The tax implications of the REX Agreement
- The effect of the REX Agreement on your family and heirs
You will have the right to cancel the REX Agreement within three business days after you sign the legal documents, and if you cancel during such three day period, you will be under no further obligation to FirstREX.
While there are no interest charges to you or monthly payments in connection with the cash you receive from FirstREX using a REX Agreement, you will continue to be responsible for interest charges, monthly payments and financial obligations in connection with any other mortgages, lines of credit or loans which you may have or take on your home. You are also responsible for real estate taxes, hazard insurance, and any other obligations with regard to your home. During the term of the REX Agreement, you are required to maintain the property in good condition, subject to normal wear-and-tear, and special conditions may apply in the event such requirements are not met.
Figures used in all examples provided to you on this website or otherwise are for the purpose of illustration only; the terms offered in a specific REX Agreement may be materially different. Certain fees, including a transaction fee, will apply when you enter into a REX Agreement. When you sell your home, you, and not FirstREX, will be responsible for paying – either from your share of any sale proceeds or from your other assets – all loans that are secured by liens on the property and all costs you may incur in selling your home, including real estate sales commissions and the cost of an appraisal. If the sales proceeds are not sufficient to pay all of the mortgage loans, commissions and closing costs, and the amount due to FirstREX, you are required to make up any shortfall.
If your home drops significantly in value, we can lose our entire investment, which is the cash payment you receive at the start of the REX Agreement, but nothing more. We cannot lose more than the amount we give you at the start of the REX Agreement.
If the value of your home rises dramatically, we can earn a substantial return on our investment, but that would typically mean that you also made a significant profit on your home. The amount that FirstREX earns as its return on its investment may substantially exceed the total amount of interest payments that you would have paid if you had borrowed a similar amount.
While FirstREX will typically subordinate to new loans offered to you by mortgage lenders, in an amount up to an agreed limit, we cannot guarantee whether mortgage lenders will agree to lend on a property with a REX Agreement to the same extent or on the same terms as they would for a property without a REX Agreement. Special conditions apply if you choose to end your REX Agreement during the first five years, either by selling your home or by repurchasing the REX Agreement, which may change our return on investment and the amount you will receive upon REX Agreement termination. Other special conditions may apply if you terminate your REX Agreement during the first ten years and the value of your home declines, or if you fail to maintain your home in good condition, ordinary wear and tear excepted. If you are unsure about how long you will keep your REX Agreement, you may wish to compare the REX Agreement with other choices. While the REX Agreement provides special conditions and terms for attributing the value of any improvements made to the property during its term to the homeowner, so that FirstREX does not benefit from any increase in value attributable to such improvements, there may be – and often is – a significant difference between the actual cost of improving or remodeling your home and the increase in market value attributable to such improvements as of the time of sale. If you do not honor your obligations, or default under the REX Agreement, FirstREX has various rights, including the right to foreclose on the property. In addition, if you choose to sell your property, FirstREX is provided a right of first refusal to purchase your property on the same terms and conditions as the offer you intend to accept. This ensures that the home sells for a fair price.
If you are still living in your home at the end of Year 30 you are required to end the REX Agreement by either selling your home or repurchasing the REX Agreement. Upon the death of all of the homeowners that signed the REX Agreement, the heirs or estate are required to settle the REX Agreement within a certain period of time by either selling the home or repurchasing the REX Agreement.
Each homeowner’s tax situation is unique. FirstREX does not give tax advice. FirstREX recommends that you contact your tax professional for any tax advice regarding the REX Agreement.