EasyKnock is a company that offers sale-leasebacks for residential properties. They provide a unique way to get the funds you need while still staying in your home.
What Is EasyKnock?
EasyKnock was founded to create a better financing option for homeowners looking to get funds out of their home’s equity. Their solution was to offer a sale-leaseback arrangement as an alternative to traditional home equity loans.
What Is a Sale-Leaseback?
A sale-leaseback is similar to a traditional mortgage, except that the seller retains title until the loan is fully repaid. When the loan is repaid, the seller returns the property to the buyer. It also gives buyers more time to find a suitable replacement home.
The basic idea behind this concept is simple: if you have an asset (your home) that can be used to secure a loan, then why not use it to do so? In other words, why not let someone else finance your purchase of another home? With a sale-leaseback, the lender provides the funds needed to purchase a new home, and the homeowner rents the home back to the lender. If all goes well, the owner will eventually repay the loan and take back their home ownership.
How Does EasyKnock’s Sale-Leaseback Work?
EasyKnock works by providing financing to borrowers using their home’s equity. A homeowner would sell their house to EasyKnock, then use the proceeds however they want. Once the new house is purchased, the homeowner could then stay in it as a renter. At the end of the loan period, the homeowner has the option of repaying the loan and repurchasing their home or letting EasyKnock sell their home while they keep any value appreciation.
What Does EasyKnock Offer?
EasyKnock offers two main programs: Sell & Stay and MoveAbility.
Sell & Stay
If you need some cash but don’t want to move, EasyKnock can help. With this program, you can sell your current home and stay in it. You’ll be able to live there as a renter. This allows you to save money on housing costs while still getting the cash you need. You have the option to repurchase your home at a later date or sell it in the open market to repay the loan.
This program helps people who are moving into a new home. This option allows you to let EasyKnock sell your home, all while having the liberty of selecting the agent and your home’s listing price. You get to receive the full market value of your home plus any value appreciation minus their Buyout Cost and your agent’s commission.
Who Can Use EasyKnock?
Anyone can use EasyKnock. However, if you plan on selling your home through them, you must meet certain requirements. These include:
- Your credit score needs to be above 620 (FICO)
- You must own the property outright
- You must not owe more than $150k on the property
- You must have lived in the property for at least one year prior to signing up with EasyKnock
Pros of EasyKnock
- No Credit Checks: Traditional lenders may run credit checks to determine whether or not you qualify for a loan. Because EasyKnock does not perform these types of checks, you can rest assured knowing that you’re approved without needing to prove yourself financially stable.
- Fast Closing Process: If you’ve ever tried to close a real estate deal with a bank, then you know how long it takes. It can take weeks just to find an appraiser, sign paperwork, and do everything else involved in closing a sale. With EasyKnock, however, you can expect your transaction to go through within days.
- More Time to Find a New Home: By allowing you to rent your home out, EasyKnock gives you more time to look for a new home. By doing so, you can avoid having to wait months before finding a new place to call home.
- No Down Payment Required: Unlike traditional lenders, EasyKnock doesn’t ask for down payments. Instead, they provide funding based on the home’s equity.
Cons of EasyKnock
While EasyKnock provides many benefits, there are also drawbacks. Here are three things you should consider when deciding if this company is right for you:
- Relieves You of Home Ownership: Because EasyKnock purchases homes from sellers, you no longer become a homeowner. As such, you won’t be responsible for making mortgage payments.
- May Not Be Right For Everyone: Not everyone will benefit from this type of service. If you’re planning to stay put for years, you might see little value in it.
- Limited Options: Because EasyKnock only sells homes, you will have little flexibility regarding where you’d like to live. For example, you won’t be able to choose between renting and buying a different type of home.
How Does EasyKnock Compare to Traditional Mortgages?
EasyKnock is a good alternative to a traditional mortgage. Traditional mortgages typically require you to pay 20% of the home’s total cost. The remaining 80% of the cost is financed over 30 years with interest payments. EasyKnock offers you the same amount of financing while giving you the option to live in your current home. If you’re looking for a quick way to raise money without having to give up staying in your home, EasyKnock may be what you’re looking for.
How to Get Started with EasyKnock
The first step is to get you qualified. To do so, all you need to visit their website and fill out their online application. Once you submit the form, they’ll match you with a program and provide you with an estimate of your home’s value and the amount of financing. Once you’ve decided, they’ll let you sign a non-binding Letter of Intent. Signing this document starts the closing process until you receive your cash fund. Once the loan matures, you have the option to buy back your home with them or sell it in the open market.