Last updated: September 8, 2026
Banks underwrite your tax return. Home equity investment companies underwrite the house, which is why the product exists for owners who have equity and thin documented income.
Because I’m self-employed, I don’t get a W-2. We pay ourselves through guaranteed payments each month, and that makes my taxes messier than most. It also creates a problem with lenders. Banks want a W-2 and pay stubs to underwrite, so any time I need a personal loan, whether it’s a car, a mortgage, or a home equity line, I go looking for other options.
That search led me to a newer kind of lender: home equity investors.
Mortgage holders now sit on a record $18 trillion in equity, with $11.7 trillion described as tappable. The home equity contract market behind that pile is still tiny. The CFPB put 2024 volume at $2 billion to $3 billion.
What Is a Home Equity Investment
A home equity investment, or HEI, gives you cash now in exchange for a claim tied to your home’s future value. It is also called a home equity agreement, shared equity agreement, or home equity contract.
You keep the deed and continue living in the home. The company does not become your roommate or take over repairs. You still pay the mortgage, property taxes, insurance, maintenance, and selling costs. The company records a lien to protect its right to be paid.
Most HEIs do not charge stated interest or require monthly payments. That does not make the cash free. You must settle the agreement with one large payment when you sell, refinance, buy out the company, reach the end of the term, or trigger another event listed in the contract.
An HEI may affect your credit score when you apply, but it depends on the company. Some providers use only a soft credit check, which does not affect your score. Others perform a hard credit check during the full application, which may temporarily lower it. Because an HEI generally has no monthly payments, it usually is not reported like a traditional loan and will not help you build credit through on-time payments. Ask each provider whether it performs a hard inquiry or reports the agreement to the credit bureaus before you apply.f
How Home Equity Investments Work
1. Apply
The provider reviews the property, your current liens, your credit history, and other eligibility rules. Some HEIs have lighter income requirements than home equity loans.
2. Your home is valued
The provider may use an appraisal, an automated estimate, or both. Some contracts reduce the starting value before calculating future gains.
3. Receive an offer
It states the cash payment, fees, contract term, provider’s share, valuation rules, payoff triggers, and any cap on the settlement amount.
4. Close
The provider records a lien. Fees and third-party costs may be deducted from the cash sent to you.
5. You settle later
The provider calculates the lump-sum payoff under the contract. You may use sale proceeds, savings, or new financing to pay it.
The CFPB’s home equity contract review found that terms vary by company. Some providers take a share of the home’s total future value. Others take the original cash back plus a share of the change in value. Starting-value discounts, multipliers, fees, and payoff caps can change the result.
How Much Cash Could You Get From a Home Equity Investment
Compare how much you can borrow and what you’ll pay in the end from the top five home equity investors.
Compare Home Equity Investment Providers
Enter your numbers to see how much cash each provider might offer, what each one would take when you settle, and who will approve you.
| Home value today ($) | |
| Mortgage and other liens ($) | |
| Cash you want ($) Each provider is limited to its own maximum |
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| Home value when you settle ($) | |
| Years until you settle | |
| How you will settle Unison only shares a loss when you sell |
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| Closing costs (% of cash advance) Appraisal, title, recording. Paid on top of the provider fee |
Assumptions. Unison and Point share the change in home value. Unison applies a 5% Risk Adjustment to the starting value and takes 4 times your cash percentage of the change. In the first 3 years on a sale, and on any buyout, Unison does not share a loss; the ending value is never lower than today’s appraisal. Unison caps what you owe at 20% over the cash in year one. That cap rises monthly after year one, and Unison does not publish the rate, so no cap is shown past year one. Point discounts the starting value by 27% and takes 3 times your cash percentage of the change; Point does not publish a cap. Hometap and Unlock take a share of the total sale price. Hometap uses 1.65 times your cash percentage for years 0 to 5 and 1.80 times for years 6 to 10, with an 18.5% yearly cap. Unlock uses 2 times with a 19.9% yearly cap. Both have 10-year terms. Fees: Unison 3.9%, Point 3.9%, Hometap 4.5% (capped at $20,000), Unlock 4.9%. Maximum cash: Unison $500,000 or 15% of value, Point $600,000 or 20%, Hometap $600,000 or 27%, Unlock $500,000 or 38.8%. Each provider also limits total debt on the home: Unison 70%, Point 70%, Hometap 75%, Unlock 80%. Splitero is not shown. It shares the change in value with a yearly cap but does not publish its share or the cap. Multiples and discounts are representative of published ranges, not quotes. Your offer depends on your credit, your home, and your state. Liens are assumed unchanged at settlement. Planning estimate only, not an offer.
Home Equity Investment vs Home Equity Loan
A home equity loan is a loan secured by your home. You receive a lump sum, pay interest, and make monthly principal-and-interest payments. An HEI swaps predictable monthly payments for an uncertain lump-sum payoff later.
Feature | Home equity investment | Home equity loan |
Structure | Cash in exchange for a contract claim tied to home value | Second mortgage loan secured by the home |
Monthly payment | Usually none to the HEI provider | Required principal and interest payment |
Cost | Depends on home value and contract formula | Based on stated rate, APR, fees, and term |
Payoff | One lump sum, often after a sale, refinance, buyout, or term end | Balance falls through scheduled monthly payments |
Underwriting | Often puts more weight on equity and property; rules vary | Reviews equity, income, debts, credit, and ability to repay |
Lien | Yes | Yes |
If the home rises | Provider’s payoff may rise, subject to the contract | Loan balance does not rise because the home gained value |
Cost certainty | Low until the home value and settlement date are known | Higher with a fixed rate and fixed term |
Main risk | A large future payoff may force a refinance or sale | Missed monthly payments can lead to default or foreclosure |
The CFPB defines a home equity loan as borrowing against your home equity. A fixed-rate loan gives you a known payment and payoff schedule. An HEI removes the monthly payment but makes the final cost harder to know.
Why the Future Payoff Can Get Expensive
The provider’s share is not always equal to the percentage of cash you received. A company might pay you 10% of the home’s value but claim a larger percentage of the home’s ending value or future gain. A discounted starting value can also create a gain on paper before the home has gained a dollar.
The CFPB found processing fees often run 3% to 5% of the upfront payment. It also found that some contract caps allowed the settlement amount to grow at a pace equal to about 19.5% to 22% per year in the early years. A cap is a ceiling, not the expected cost and not a quoted interest rate.
In the CFPB’s example, a homeowner received $50,000. After 10 years, the modeled settlement ranged from $94,074 to $215,892, depending on the path of the home’s value. That example shows why you need the provider’s full payoff formula, not just the amount of cash offered today.
What Determines Your Actual Offer
- The appraised or adjusted value of the home.
- The balance of your mortgage, HELOC, tax liens, and other property liens.
- The amount and percentage of equity that must remain after closing.
- Your state, property type, occupancy, title, insurance, and home condition.
- Your credit and recent mortgage, bankruptcy, or foreclosure history.
- The provider’s minimum and maximum transaction sizes.
When an HEI May Make Sense
An HEI can solve a cash-flow problem when you have substantial home equity but cannot qualify for a normal loan or cannot handle another monthly payment. It is easier to defend when you also have a clear plan to settle the contract, such as a planned home sale or a realistic path to future financing.
It is a weak fit when you can qualify for an affordable home equity loan, expect to keep the home for many years, expect strong appreciation, or do not know how you will fund the lump-sum payoff. No monthly payment can help today while creating a larger problem later.
Questions to Ask Before You Sign
- How much cash will I receive after every fee and closing cost?
- What starting home value will the contract use, and is it lower than the appraisal?
- Does the provider share in total home value or only the change in value?
- What would I owe after 1, 3, 5, and 10 years if the home falls 5%, stays flat, rises 3% a year, or rises 6% a year?
- Is there a minimum payoff, multiplier, risk adjustment, or annual return cap?
- Which events can force an early settlement?
- Can I repay part of the agreement, or must I settle the full amount at once?
- How will renovations, repairs, or poor property condition affect the ending value?
- Will the lien make it harder to refinance my first mortgage or add a HELOC?
- What is my written plan to pay the lump sum without a forced sale?
The Bottom Line
A home equity investment turns part of your home equity into cash without a required monthly payment. In return, you accept a lien and a future payoff tied to the contract and the home’s value.
Start with the cash estimate. Then spend more time on the settlement formula. A home equity loan is usually easier to price because it has a stated rate, monthly payment, and payoff schedule. An HEI can reach homeowners a bank may reject, but that flexibility can cost far more.