What is Home Co-Investing?

Written by Banks Editorial Team
4 min. read
Written by Banks Editorial Team
4 min. read

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You want to access the equity in your home but aren’t quite sure if a co-investment is the right choice. Should you get a home equity loan, a home equity line of credit (HELOC), or do a cash-out refinance instead? 

It depends on your financial situation, credit health, whether you actually occupy the home, and your long-term plans.

In this guide, you’ll learn how co-investing works, if it could be a good fit for you, and how this option stacks up against other solutions to access home equity. If you decide to pursue a co-investment in your home, you’ll also learn how to move forward. 

Access Your Home Equity

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Learn how Unison can help you leverage the equity in your home to unlock financial success without accumulating extra debt.
Learn how the Unison HomeOwner co-investment program can help you tap into your home’s equity to finance your lifestyle without added debt.

What Is Equity Co-Investment? 

Co-investment opportunities allow you to tap into your home’s equity without borrowing against it. You won’t have to worry about adding to your debt load or making monthly payments.

Instead, an investor offers a cash payment to you today in exchange for the option to share in future profits if your home increases in value. And if your home decreases in value in the future, in most cases, the investor will take a loss alongside you. 

Is Home Co-Investing a Good Solution for You?

Home co-investing is ideal if you want to access the equity in your home without refinancing your existing loan or taking out a home equity loan or HELOC. You should also use the home as your primary residence and be planning to stay put for at least five years. 

However, if you’re planning to refinance your home soon, co-investing may not be a good fit as it could cause issues and prevent you from moving forward. You also want to consider other options if you don’t hold your home as an individual or joint tenant. 

The Benefits of Home Co-Investing

There are many reasons why home co-investing is worth considering, so let’s review these important considerations. 

No Added Debt

Co-investments don’t add more debt to your plate, unlike home equity loans, HELOCs, and cash-out refinance products. This means you can continue to live your life and meet goals without stretching your budget too thin. 

No Monthly Payments

Co-investments are free of monthly payments and interest. In fact, you have until the end of the agreement term to sell your home or buy the investor out. At that time, you will have to compensate the investor for the original investment amount and a share of the increase in value. But, in most cases, if the home decreases in value, you will get to subtract a share of the loss from the original investment to determine what you owe. 

Use The Cash for What You Want

Whether you want to pay off debt, renovate your home, or fund your retirement, a co-investment can help you accomplish your goals. The cash you receive in exchange for a share of your home’s future appreciation or depreciation can be used how you see fit. 

Potentially Increase the Value of Your Home

Are you planning to make home improvements with the funds received from the co-investment? You could potentially increase the value of your home, boost the curb appeal and earn even more when it’s time to sell. 

Access Your Home Equity

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Learn how Unison can help you leverage the equity in your home to unlock financial success without accumulating extra debt.
Learn how the Unison HomeOwner co-investment program can help you tap into your home’s equity to finance your lifestyle without added debt.

How Does Equity Co-Investments Usually Work?

Home equity co-investment options, like the Unison HomeOwner Program, give you cash in exchange for a share of your home’s future increase (or decrease) in value. 

You’ll likely need to have a certain credit score and loan-to-value (LTV) to qualify for a co-investment. Unison requires a FICO score of 620 or higher and an LTV that doesn’t exceed 75 percent. The allowable debt-to-income (DTI) ratio depends on the homeowner’s specific situation. (Lower credit scores generally call for lower LTVs and DTIs). 

Below is a breakdown of the Unison HomeOwner Program’s process:

  • Step 1: Get pre-qualified for a co-investment. There’s no impact on your credit, and it only takes a few seconds. 
  • Step 2: If you’re pre-qualified, complete the online application or call Unison directly to get started. 
  • Step 3: Upon approval, Unison will connect with you to schedule an appraisal of your property. 
  • Step 4: Review your closing documents and sign your offer letter. It’s possible to receive funds in as little as three days. 

The funds are yours to use however you see fit, and you’ll have up to 30 years to sell your home or buy out the agreement. 

How Home Co-Investing Compares to Other Solutions to Access Home Equity

Are you torn between home co-investing, home equity loans, and HELOCs? Here’s how they compare. 

Home Co-Investing vs. Home Equity Loans

Home equity loans allow you to borrow up to 90 percent of the equity in your home. Funds are disbursed in a lump sum and payable over time in equal installments. If you default on the payments, the lender could seize your home and sell it to recoup losses. 

Co-investing is free of monthly payments and interest, and the investor shares in the profits or losses when you sell the home or the term of the agreement ends. 

Home Co-Investing vs. Home Equity Lines of Credit (HELOC)

Like home equity loans, HELOCs let you tap into your equity to get the funds you need. However, you will get access to a line of credit instead of a lump-sum payment and can make withdrawals over a draw period of 10 or so years. During the draw period, you will also make interest-only payments on the funds you borrow. 

Once the draw period ends, repayment of principal and interest will commence. Unfortunately, this could mean bad news for your budget if you withdrew a sizable amount of money. 

With home co-investing, there is no draw period. Instead, the funds are provided when you agree to the offer. You won’t have to worry about paying the investor until the agreement ends. 

How to Tap Into Home Equity Through Home Co-Investing

Are you interested in moving forward with a co-investment? Consider a reputable option, like the Unison HomeOwner Program, to unlock the equity in your home. You could qualify for a co-investment of up to 17.5 percent of your home value – the amount ranges from $30,000 to $500,000. 

Unison is accredited by the Better Business Bureau with an A+ rating. To date, the value of homes it has invested in is over $4 billion, and this figure continues to grow daily. Take the first step by inputting your address into the online form to get an instant estimate and learn more about how the HomeOwner Program can help you tap into your equity without adding extra debt.

Unison

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