Best Home Equity Sharing Companies

Money’s Main Takeaways

• Among our top picks for home equity sharing companies are Point - best for customers with bad credit, and Hometap - best for customers with fair credit.

• Home equity sharing is a viable option for homeowners seeking alternative ways to access the equity in their homes without taking on additional debt.

• Equity-sharing agreements can be settled in various ways. You could buy back the equity directly from the investor, get a cash-out refinance or personal loan and use the proceeds to pay the investor, or sell the property and share the proceeds.

Since 2016, Money’s editorial team has been researching a wide variety of home equity products, including loans, HELOCs and home equity sharing options. This guide will provide a comprehensive overview of the best equity sharing companies in this space, including how they operate, what you need to know before engaging with them, and the potential advantages and drawbacks of using their services.

Our Top Picks for Best Home Equity Sharing Companies

• Point: Best Home Equity Sharing for Bad Credit
• Hometap: Best Home Equity Sharing for Fair Credit
• Unison: Best Home Equity Sharing for Long Terms
• Unlock: Best Home Equity Sharing for Single-Family Homes
• HomePace: Best Home Equity Sharing for Buyout Flexibility

Best Home Equity Sharing Companies Reviews

Why we chose it: Point requires a minimum credit score of only 500+ to qualify for home equity investment. This enables individuals with less than perfect credit to get access to upfront funds in exchange for a portion of their home’s future appreciation.

Point´s shared equity agreement allows homeowners to access between $25,000 and $500,000 of their home equity, with a term length of 30 years. Customers control when they exit the partnership during the term. While Point charges a 3.9% to 5% processing fee and requires an appraisal visit that costs between $500 and $820, you don't have to pay these fees upfront.

Point also offers a lot of flexibility in terms. You can settle your home equity investment any time within the 30-year term, paying back the initial lump sum received along with a percentage of the change in the home's value. Point also allows investments in rental properties, though at a premium.

Why we chose it: Hometap is an exceptional choice for homeowners with fair credit seeking to leverage their home equity as most of the homeowners the company works with have a credit score of 600+.

Hometap does not require customers to make monthly payments. However, the company must be paid the percentage of your home equity they are owed by the end of the investment term. For instance, if you secure $15,000 in upfront funds for a $100,000 home, Hometap will receive that proportion of your home's future value when you sell it or at the end of the term. Their maximum investment amount is $600,000.

Another advantage Hometap offers is it won't do a hard pull on your credit until you submit an investment application. This means getting an estimate won't negatively affect your credit score, which can be a significant consideration if you're shopping around or are working to improve it.

The biggest disadvantage to Hometap is the lack of flexibility in buyout options. It may force you to sell the house if you can't repay within 10 years. Additionally, though you can qualify for Hometap with a credit score of 500, you'll have more favorable term options if your credit score is 600 or above.

Why we chose it: Unison has extended 30-year term options which significantly surpass most competitors' offerings. This extended timeframe offers you greater flexibility and ease in managing your financial obligations while benefiting from Unison's investment in your property's value.

Unison is an investment company founded in 2004 with equity sharing available in 29 states and Washington, D.C. Unison invests up to 15% of your home's current value in exchange for cash and shares in the appreciation or depreciation of your property value. Investment amounts range from $30,000 to $500,000.

You can settle your agreement with Unison within 30 years through a buyout, selling your house or refinancing. However, be aware that Unison will not share in any loss of value if you opt for a buyout. There’s also an initial five-year restriction period where Unison does not share in any loss in value if you sell the home.

The buyout costs include Unison's share in the appreciated value and an appraisal to determine the current value. Fees include a 3.9% transaction fee, an appraisal fee ranging from $450 to $1,050 and settlement costs between $700 and $1,750.

Unison is vested in your success as it shares the risk of depreciation after the restriction period. However, you can't rent out your home during the term. Overall, customer reviews highlight the benefits of large payment amounts but caution about third-party fees and the limitation on renting out properties.

Why we chose it: Unlock has a large investment cap and provides a likely chance of higher investment if you live in your home.

With Unlock, you can sell a portion of your equity in exchange for a percentage of your home's future value. They cap investment amounts at $500,000, but the specifics will depend on several factors.

Unlock determines eligibility for equity sharing through four levels of criteria: current home value, existing house debt, creditworthiness and property utility. Although Unlock does invest in rental property, they prefer owner-occupied homes. You're more likely to be approved if the home is your primary residence. If you do rent it out, you'll need to verify the rental income.

Homeowners can buy out Unlock's position at any time within the 10-year term length without penalty. Buyout options include paying a lump sum or installments.

One significant disadvantage to Unlock is when you buy out, you'll be paying back a greater percentage in equity than originally purchased. For example, the company may give 10% of your home's equity today in exchange for 20% of its future value. Depending on changes in the market, you could end up paying back significantly more than the amount you received.

Fees include a 4.9% origination fee at closing. Additionally, you may need to cover appraisal costs and other expenses.

Customer reviews mention the possibility of receiving funds with imperfect credit and large investments as positives. However, the service is limited to 15 states, and there is a risk of losing the home if the equity is not bought back by the end of the 10-year period.

Why we chose it: HomePace's longer 15-year buyout term and lack of out-of-pocket costs give you more flexibility than most home equity-sharing companies.

HomePace offers co-investment agreements in six states: Arizona, Colorado, North Carolina, Tennessee, Utah and Washington. With credible backing by institutional investors such as pension and hedge funds, HomePace is well-positioned to co-invest with homeowners, giving them cash in exchange for a share of their home's equity.

HomePace can purchase up to 15% of your home's equity, with a maximum investment of $250,000. As with all home equity sharing agreements, you don't make monthly payments. Repayment is due only after you sell the house or a 15-year term, whichever comes first.

HomePace charges a 3% to 4% origination fee, which is deducted from the funds received by the homeowner, meaning there are no out-of-pocket expenses. Homeowners must have a credit score of at least 630 to be eligible, which is higher than some other companies.

The 15-year term length offered by HomePace is longer than the standard 10-year term, giving you more flexibility when you buy out.

Other home equity sharing companies we considered

We evaluated home equity sharing companies on investor credibility, investment amounts, fees and buyout costs, buyout options, eligibility requirements, term lengths and customer reviews. The following companies have competitive offerings but weren’t chosen for our best-of list because they didn’t stand out above others in any specific category.

QuantmRE

QuantmRE pays homeowners between 10% and 30% of their home's current value in exchange for a share of the home's appreciation or depreciation. QuantmRE places a lien on the property to secure the agreement. The approval process mainly involves evaluating the home's equity and potential for appreciation or depreciation rather than the homeowner's credit score. However, the lack of transparency, potential for high costs in the case of property appreciation and unclear terms in depreciation scenarios — along with the young nature of the company — eliminated it from our top picks.

EquiFi

EquiFi has a lot of promise in the home equity-sharing industry. It’s the only company whose buyout options are event-driven rather than defined in time limits, meaning you have the option of buying them out at any time or when you sell your house. Other events, such as the homeowner's death or default on the mortgage, are also buyout triggers. However, EquiFi is extremely new and only available in California, so it's not widely available enough to be a top choice.

EasyKnock

EasyKnock operates a little differently than most equity-sharing programs. Their Sell & Stay program is a short-term program that allows homeowners to receive up to 75% of their home’s value in cash and offers the option to repurchase the home later.

Instead of repaying the equity in 10, 15 or 30 years, you'll lease your house from EasyKnock for up to five years, which means you'll be making payments to stay there. If the property appreciates during this time, you can benefit from that appreciation. However, the fact that you’ll have to pay rent, the short term of five years and the necessity of adding them as co-owner limit its usefulness.

Home Equity Sharing Companies Guide

Home equity-sharing companies offer a way for homeowners to improve their personal finances by unlocking the value of their homes without taking on more debt, something even the best home equity loans can't offer.

Before deciding which home equity sharing company is right for you, learn how equity sharing works to make sure its the right choice for you. Always consider factors such as customer service, terms of agreements and reputability to ensure you make the most informed decision possible.

What is home equity sharing?

Home equity sharing is a financial arrangement where a homeowner sells a percentage of the equity in their home to an investor or a company in exchange for a lump sum of cash. The homeowner can use this cash for various purposes, such as home improvements, paying off debts or investing.

How does home equity sharing work?

Unlike a traditional home loan or home equity loan, the homeowner doesn't take on debt or make monthly payments. Instead, when the home is sold or the agreement ends, the investor receives a share of the home's value, which may have increased or decreased since the initial agreement. This arrangement allows homeowners to access the value of their homes while sharing the risks and rewards of homeownership with an investor. Here's how it typically works:

• Select an equity-sharing company: Before you begin, select a reputable home equity-sharing company or investor. It's crucial to do thorough research and consult a financial advisor.

• Application process and approval: After selecting a company, you must apply for its equity sharing program. This usually involves submitting financial documents and information about your property. The company will then assess your eligibility based on your credit score, existing equity in your home and the property's location.

• Property appraisal: The company will professionally appraise your property to determine its market value. This appraisal is fundamental as it sets the baseline value of the shared equity.

• Contract negotiation: Once you've established the value of your home, you'll enter into negotiations with the investor. The talks will include discussions about the percentage of equity being sold, the share of appreciation or depreciation the investor will receive, and any applicable fees or charges.

• Legal agreements: After negotiations, you'll have to sign legal agreements. These documents should clearly outline the terms and conditions of the equity-sharing arrangement. It's highly advisable to have a lawyer review these agreements.

• Receive funds: Once the agreements are signed, the investor will provide the agreed-upon funds. You may use this capital for any purpose, such as paying off debts, making home improvements or investing.

• Ongoing responsibilities: During the agreement term, you'll continue to be responsible for mortgage payments (if applicable). Similar to a reverse mortgage, you’ll also need to stay current on property taxes, insurance and maintenance. Your agreement might also specify conditions for how you must maintain the property.

• Monitor property value: Throughout the equity sharing agreement, the value of your property may fluctuate. Keeping track of this is essential as it will affect the final settlement.

• Settlement options: There are different ways you can settle equity-sharing agreements. You might buy back the equity at market value, sell the property and share the proceeds or refinance the home to pay off the investor.

• Exit fees and sharing appreciation or depreciation: There may be exit fees or other pricing upon settlement. Additionally, if your home's value has changed, the investor will receive a share of the appreciation or bear a share of the depreciation as agreed upon.

The pros of home equity sharing

By selling a portion of the equity in your home, you can receive a lump sum of money or a series of payments. This approach offers various benefits catering to different financial needs and goals. Home equity sharing presents several advantages, from avoiding additional debt to having the freedom to use funds without restrictions.

Access to funds without taking on additional debt

Home equity sharing enables you to tap into the value of your home without borrowing money. You receive a lump sum or a series of payments in exchange for a share of your home's equity. Unlike a traditional loan, you don't incur debt, and no interest accumulates over time.

No monthly payments

One of the biggest benefits of home equity sharing is that there are no monthly payments involved, so it won’t be a hit to your cash flow. Since you're not taking out a loan, you don't have a repayment schedule to adhere to. This can be a relief, especially if you're on a tight budget or have variable income. It gives you more financial breathing room than a home equity loan or line of credit, which would require regular payments.

Flexibility with how the funds can be used

The funds you receive through home equity sharing come with no strings attached regarding how you must use them. You can use the money in any way you see fit. This can range from making home improvements, paying for education, investing in a business, or even taking a dream vacation. This flexibility allows you to prioritize your financial goals and make decisions best suited to your circumstances.

The cons of home equity sharing

While home equity sharing offers an array of benefits, it's crucial to consider the potential drawbacks of entering into such an arrangement. You should weigh the immediate financial relief against the long-term implications for ownership and financial flexibility.

Loss of full ownership

When you enter into an equity-sharing agreement, the investment company becomes a secondary lien holder. You still retain your position as homeowner but you may have less control over certain decisions, such as renovations or refinancing.

The investor also shares any future appreciation in your home's value. This means you may not reap the full benefits if your property value increases significantly. Additionally, some agreements may have constraints on how you can use or alter the property, which may not align with your plans or preferences. If you don't want to give up control, you may be better off if you get a home equity loan or home equity line of credit (HELOC).

Risks associated with both appreciation and depreciation

If your property appreciates, you'll have to share that appreciation with the investor based on the equity percentage they own. This can mean parting with a substantial sum when the agreement concludes. Conversely, if your property depreciates, the investor may still be entitled to a return on their investment, meaning you owe more than anticipated. Real estate markets can be volatile, and predicting how your property will fare over the term of the agreement means taking on a certain element of risk.

Having to make a lump sum payment

At the end of the equity sharing agreement, you will likely have to make a lump sum payment to the investor to either buy back the equity or settle the agreement. This payment can be substantial, particularly if the property has appreciated significantly. If you don't have the funds readily available, you may need to sell your home to repay the investor.

Or, you may need to secure financing to make the lump sum payment, which can introduce new debts and financial complications. The requirement to make a lump sum payment can also impact your future plans, such as retirement or other large purchases, as it can take a significant portion of your savings or income.

How We Chose the Best Home Equity-Sharing Companies

Our methodology for creating the best home equity sharing companies list included the following criteria:

• Investor credibility: We evaluated each company's trustworthiness, including where and how the company obtains funding.

• Investment amounts: We considered the percentage of ownership the investment company will loan against and the maximum investment limits.

• Total costs: We looked at all of the fees and buyout costs, including origination fees and prepayment penalties.

• Buyout options: We prioritized companies that offered more flexibility in buyout options, including term lengths, selling and repayment.

• Eligibility requirements: We gave higher rankings to companies that were more lenient with eligibility requirements, such as credit score and minimum loan-to-value ratios (ltv).

• Customer reviews and satisfaction: We evaluated companies based on customer feedback and ratings.

Summary of Money’s Best Home Equity-Sharing Companies

• Point: Best Home Equity Sharing for Bad Credit
• Hometap: Best Home Equity Sharing for Fair Credit
• Unison: Best Home Equity Sharing for Long Terms
• Unlock: Best Home Equity Sharing for Single-Family Homes
• HomePace: Best Home Equity Sharing for Buyout Flexibility