With mortgage lending standards tightening across the country, it is no surprise that there are different methods of financing cropping up again. One of these methods is known as shared equity finance.

Shared equity finance

In shared equity finance, a stronger financial partner acts as an investor, but allows the weaker party to live in the home. Equity that is built is shared out proportionally. Investopedia also adds this about shared equity finance:

These agreements are usually charitable in nature, and state that the
latter party must pay a proportional share of the mortgage payment as
well as expenses, such as insurance and property taxes.

Some parents use this shared equity finance to help their children get into a home.

I wonder if Donald Trump’s recent purchase of Ed McMahon’s mansion is shared equity finance — or if it is a straight buy that he will lease back to McMahon.