Homeowners often use a home equity loan to fund personal projects, improve their homes, pay off credit card debt or consolidate medical bills. But there are many ways to tap into your home equity without taking out a traditional home equity loan or refinancing your home. This alternative is called home equity investment, where you borrow against the value of your house rather than getting a loan, making monthly payments and paying interest over time.
What is Point?
Point Home Equity Investment is a novel way of accessing your home equity by cashing it out in exchange for a share of the future value of your home. This is a great way to access your home equity and invest in your own property without having to borrow any money or pay interest on loans. This is different than most HELOCs or Home Equity Loans because it doesn’t add to the balance owed on your mortgage. Instead, you use your existing equity to fund the loan.
Aside from home equity investments, Point also offers traditional Home Equity Loans (HELOCs) for homeowners that own a house in the estate of California. And suppose you are looking into purchasing a house but only have a 5% down payment. In that case, they also offer a Seed Down Payment Investment to increase this amount and allow you to qualify for a better mortgage, decreasing your future monthly payments.
How the Point Home Equity Investment Program Works
Point allows you to take out up to $500,000 in home equity investments with an up to 30-year term. This program gives people access to their home equity without having to put it into a mortgage. If you already own a house, you could use this money to pay off debt, start saving for retirement, or just enjoy some extra cash.
The process of getting equity out of your home is simple. First, Point needs to evaluate whether you qualify for HEI based on your credit score, current monthly income, total assets, and mortgage loan balance. Once approved, Point will prepare an equity sharing agreement that gives them a share of the future value of your home and hand you the cash you agreed to in exchange.
When you are ready to pay Point back, You will be required to repay the original investment plus a percentage (usually between 25-40%) of your home’s appreciation.
What are the Benefits of Point Home Equity Investment?
The main benefit of this type of loan is that it allows you to take advantage of your home’s rising value while avoiding the risk of losing your home if you decide not to make payments. It also gives you an opportunity to earn more income from your home. You can use your home as collateral instead of cash. In return, you receive a percentage of the future value of your home when you decide to sell the house. The higher the value of the home at the time of the sale, the larger the profit. Let’s review other benefits of using a Home Equity Investment (HEI) over other traditional home equity loan products:
1. Protects Principal
When you use a traditional mortgage, you make regular payments toward the principal balance. If you stop paying, the lender takes ownership of your home. This puts you at risk of losing your home. With the Point Home Equity Investment, you never lose control over your home.
2. You Get to Keep Your Home
If you decide not to renew your contract with Point, they won’t take ownership of your home. They also won’t force you to sell your home if you want to move.
3. You Get to Share the Risk
With a traditional mortgage, you’re responsible for all the costs associated with owning a home, and if the house loses or gains value, you get all the risk. When you get a home equity investment from Point, you share those risks with them.
4. No Monthly Payments
Unlike a traditional mortgage or a conventional home equity loan product, which requires monthly payments, you only have to repay when you want to, at the end of your term, or when you decide to sell your home (whatever comes first).
5. No Debt
Point Home Equity Investments allows you to access your home equity without adding to your debt burden.
6. Interest-Free
With a traditional mortgage, you would pay interest on the principal balance until you sold the house. With Point Home Equity, you won’t pay anything until you sell your home. The only cost is the transaction fee that’s charged when you close the deal.
Is a Point Home Equity Investment Right for You?
There are several reasons why Point Home Equity might be right for you. For starters, it’s an easy way to get access to your home equity without borrowing any more money or making monthly payments. It also allows you to take advantage of your home equity while still keeping your original mortgage. And finally, if you’re looking to make improvements to your home, you can do so without taking on additional debt.
Point Home Equity Investment is a great alternative to traditional mortgages if you want to tap into your home’s equity and don’t want to worry about making monthly payments and incurring additional debt. It all comes down to whether you’re willing to let Point share in the future appreciation value of your home.
How to Get Started with Point Home Equity Investment
To get started, you simply need to visit the Point website and enter your home address to check if your home prequalifies. If it does, a home equity expert will get in touch with you to complete your online application by uploading the necessary documents. An appraiser will then visit your home and assess its value. When everything is done, all that’s left is to close and get the funds that you need.
