Frequently Asked Questions

Since we’re making some big improvements in real estate ownership and investing, we figured you’d have some questions.

When is Rook launching?

Rook launched in a limited beta mode in November, 2021. We launched our Shared Value Mortgage in March, 2022 in Colorado.

Why did we create the Shared Value Mortgage?

Affordability. Liquidity.Equity. Part of the inspiration came from personal, real-life cases of people having to sell homes prematurely due to lack of liquidity. Then, more recently watching the phenomenal rise in housing prices. As parents of Gen Z kids, we’re seeing this new generation face a daunting path to homeownership–and to the ability to begin building equity in real estate. We started asking: How can we innovate on the existing mortgage framework to leverage fintech and DeFi to provide liquidity to cash-poor but equity-rich Americans, and make real estate appreciation attainable to everyone?

Why is it a Mortgage?

The mortgage is generally a trusted instrument– by financial institutions, government entities, and consumers. We all know it, and many laws, consumer protections, and trusted frameworks exist to administer, ensure transparency, and make it all work. We don’t have to throw all that away by using totally new, untested instruments–we just need to innovate on top of it. Further, we think we will be able to partner with existing financial institutions and existing lenders this way–to offer a more comprehensive suite of solutions to our homeowners. 

Is Rook licensed and compliant?

Yes.  Rook is registered as a mortgage company with the Nationwide Multistate Licensing System (NMLS) and with the state of Colorado Department of Real Estate (CDRE).  Click here for our company registration page.  Additionally, we have team members who are licensed as Mortgage Loan Originators.  

We have structured our product as a mortgage—to work within the existing and trusted legal framework that underpins mortgage lending.  This includes all the appropriate disclosure schedules and compliance with laws such as TILA (Truth In Lending Act).  Unlike others offering shared equity products that are structured as Option agreements, our product is a mortgage.  

We have engaged two national law firms to assist us with the compliance of our product offerings: one on the consumer finance side and one on the securities/investor side. 

How does it work?

Our loan concept relies upon “shared appreciation.” Rook lends you money with no monthly payments in return for a share of your home’s appreciation. While it is a mortgage, you can think of it like an “investment” in your house since our return is primarily based on the appreciation over time.

How much money can I borrow?

Our loan amount range is $50,000 to $350,000. The amount Rook will ultimately offer and the amount of our share will be based on your home’s value, your current equity, and your creditworthiness.

I already have a mortgage on my house – can I still borrow from Rook?

Yes, you can have an existing mortgage on your home.  However, there can only be one other mortgage or loan on your home in addition to the Rook loan.  So, if you have a Home Equity Loan it would need to be paid off with the Rook funds.

What is the term of my Rook agreement - how long do I have to pay it back?

The standard term is ten years. However, you have the option to pay off the loan any time or to sell your home whenever you want. Our loan would become due at the time of sale.

Can I pay off my Rook loan early?

Yes - you can pay back your loan at any time with no prepayment penalties.

What happens at the end of the 10-year term?

At the end of the term, if you are not planning to sell your home, Rook will help you with refinancing options through our partnerships with various traditional lenders. Given your home equity growth, you likely could refinance your home or consider another Rook Shared Value Mortgage.

Who is on the title?

Ownership does not change; you remain the titled owner–with all the rights and privileges of ownership–just like your primary mortgage. We simply have a lien on the property, just like your existing mortgage.

How is this different from a bank home equity loan?

Unlike a traditional home equity loan, there are no monthly payments or accruing annual interest charges associated with Rook’s Shared Value Mortgage. In exchange for cash upfront, we share in a portion of your home appreciation.

How is this different from a reverse mortgage?

While both allow you to “tap into” your home’s existing equity to obtain cash with no monthly payments, there are some key differences–the main one being age requirements. Typically you need to be at least 62 years old. Generally, fees and costs are higher, there are ongoing fees (for example, Mortgage Insurance Premium), and annual interest continues to apply/accrue (regardless of how your home value changes). A reverse mortgage also usually requires a first lien position, so you would have to pay off any existing mortgages with the loan funds. And a reverse mortgage is not assumable by your heirs so if you die, the entire loan will become due within 12 months.

What are the fees and costs for a Rook Shared Value Mortgage?

Rook charges a 2.5% origination fee with a minimum of $1,500 of the original loan amount for the processing of the loan.  So, for loans up to $60,000, the origination fee is $1,500 and above that it is 2.5%.  There are also a handful of third party fees associated with the loan closing that include things like an appraisal (if required), escrow, notary, county document recording and title charges, and closing/settlement charges.  The third party fees will vary but are typically in the range of $1,000 to $2,500.  Fees will be disclosed in more detail for you to review and agree to as your application proceeds. 
 
These charges will be withheld from your loan proceeds; you will not have to come up with cash upfront.  

What is 'Upgrade Now Pay Later'?

We want you to love your home; we want you to upgrade and renovate to your heart’s content! As a homeowner, you can tap into your hard-earned equity to create your dream-home. With such a shortage of homes, this may be more possible than finding a new one. Rook can help you pay for upgrades to your existing home so you can enjoy the immediate benefit of an improved lifestyle and the future financial return that come from upgrades and renovations. If we know the primary purpose of your loan is to renovate, we can work with you to enlist an independent appraiser to determine the value-increase attributable to your upgrades.

How much of the value of my home appreciation does Rook share-in?

This shared value percentage will depend on several factors including the amount of your loan, your current equity, and your overall financial situation. In general, the lower the amount of your loan, the lower the Rook equity share; the higher the amount of your loan, the higher the Rook equity share. Our shared value percentage will typically range between 10 and 50%.  With some limited, upfront information from you, our pre-qualification process will provide you with a unique, shared value percentage estimate.  

How much do I owe to Rook when my loan is due (or I decide to pay it off)?

The payment to Rook will be your loan principal amount plus the shared value percentage applied to your home valuation change (the difference between your Beginning Property Value and the ending value). See FAQ below for more on the beginning value; the ending value will be determined by an independent appraisal or the sale price at the time of pay-off (the greater of the two). 

What if my home value goes up significantly?

That would be awesome! Rook’s modeling to determine our shared appreciation percentage is somewhat conservative and based on longer-term average residential real estate appreciation – around 4-5% historically. As we all know, real estate markets may be higher or lower than that at times. Various consumer protection laws cap rates of return on loans; this is another protection to you as the borrower to being in a loan structure. If you were to pay-off early in the term and/or the market increased way above our longer-term averages, these caps would kick-in to limit the amount of shared appreciation due to Rook at the time of pay-off.

What happens if my home value goes down?

That would not be awesome. Rook shares in the ups and downs of the market with you. And, if the value of your home goes down significantly (beyond the agreed upon Beginning Value), you will only owe your original principal amount.

How does Rook determine my property value?

As a forward-thinking technology company, we believe that traditional appraisals are not always necessary and often not significantly more accurate than reputable data providers--home valuation is far from an exact-science. Our initial, pre-qualified offer to you is based on estimates from third party data companies like House Canary, Zillow, and Redfin. Upon application, we will take a closer look at your property and consider any information you provide: a recent appraisal, information on major upgrades you have made to your home likely not reflected in data sources, or other information. Depending on variation between sources, we may need an independent appraisal, and may revise our estimate. Generally, Rook applies a 10% downward adjustment factor to whichever source is used to build-in a buffer to the inherent variability in valuation estimates and to the market volatility risk in our unique, shared value mortgage. 

The bottom line is:  We will work with you to arrive at an agreed-upon Beginning Value, and you will have the opportunity to accept or reject this valuation–as well as any adjustments to your initial offer– before proceeding further. 

I occasionally Airbnb my house - is that OK?

Yes. While Rook will initially only loan to primary residences that are owner-occupied, occasional rentals are just fine.

My house is jointly owned - how does that affect my Rook application?

We will need to obtain information to qualify anyone else who is on your home’s title, including credit score and income information. Any person on your home’s title will also need to sign the final legal documents — the primary ones being a Promissory Note and a Deed of Trust.

INVESTORS:

As an Investor, am I eligible to participate?
Rook’s long term goal is to broaden the universe of home buyers and investors by making it possible to own a little bit of a home or a little bit of many homes. Putting your money to work for the long-haul shouldn’t be reserved for the rich, the elite and institutional investors.  In the short-term, however, as we build the bridge from the old world to the new world, there are many legal hurdles to navigate. For that reason, our investment platform is limited initially to accredited investors. You can rest assured we are working hard to open up broader access just as fast as possible.

When will Rook Tokens be available?
Rook will launch its tokens in early 2022. If you want to join our community and conversations about our token strategy please join our Discord here.

Will I need a digital wallet for my tokens?
Yes, but don’t worry, Rook will provide you with a Wallet option if you currently don’t have one.

As an Investor, am I eligible to participate?

Rook’s long term goal is to broaden the universe of home buyers and investors by making it possible to own a little bit of a home or a little bit of many homes. Putting your money to work for the long-haul shouldn’t be reserved for the rich, the elite and institutional investors.  In the short-term, however, as we build the bridge from the old world to the new world, there are many legal hurdles to navigate. For that reason, our investment platform is limited initially to accredited investors. You can rest assured we are working hard to open up broader access just as fast as possible. 

When will Rook Tokens be available?

Rook will launch its tokens in early 2022. If you want to join our community and conversations about our token strategy please join our Discord here.

Will I need a digital wallet for my tokens?

Yes, but don’t worry, Rook will provide you with a Wallet option if you currently don’t have one.