The equity in your home, when used correctly, can be a powerful tool in reaching your financial goals. And countless homeowners are looking to take advantage of today's booming housing market. There are numerous ways to get cash for your home equity, including home loans and HELOCs. But a third option is a home equity investment which gives you cash today in exchange for a portion of the future value of your home: no loans, no monthly payments, no kidding. If that sounds like something that might be a good fit for your situation, you need to know about Hometap Equity Investment.
What's Hometap Equity Investment?
Simply put, Hometap Equity Investment is a way for homeowners to be paid today for the equity they’ve accumulated in their property — without getting a loan. They invest alongside homeowners, providing cash today and participating in the proceeds at the time of sale. Unlike a lender, Hometap receives no monthly payments or guaranteed return on the money they’ve invested. For some, taking an equity investment can be an intelligent way to fund the opportunities and needs that come up in life while eliminating the “debt stress” of increased monthly payments.
The term of a Hometap Investment is 10 years. You can either buy out the Investment with savings, take out a home equity (or other) loan, or sell your home during the 10-year term. Hometap calls this process settling the Investment they've made in your home.
How Does It Work?
How Hometap Equity Investment works is simple, straightforward, and transparent. It all begins by checking to find out if you prequalify. This happens in a matter of seconds. Once you are prequalified, Hometap prepares an Investment Estimate for your property based on the information you provide. They assign you to a dedicated Investment Manager to assist you throughout the remainder of the process. Next, if it’s a mutual fit and you decide to apply, you’ll complete a short online application.
Then Hometap will order a third-party home appraisal to determine the value of your home. Based on the outcome of the appraisal, combined with the information in your application, your investment offer will be prepared. From there, Hometap will make an investment offer, and once you accept it, together you'll schedule the signing. A few days later, Hometap will wire you the funds in exchange for their investment in your home, and you are free to use that money however you choose. All you have to do is make sure you sell or settle the investment before the end of your 10-year term wherein Hometap is paid their agreed-upon share.
Is Hometap Right For You?
Because there are many factors involved in this process , there isn’t a black-and-white list of criteria. Each property is evaluated independently. That’s why the investment process starts with the Fit Quiz to see if you qualify for their program. If you qualify based on the data you've provided, you can complete an Investment Estimate so that Hometaps's Investment Managers have the information they need to speak with you about your specific scenario. Here are some of the qualities that tend to make for a good fit:
- Your single-family home or condo is located in a state in which Hometap is currently operational.
- You have a credit score above 600 (though Hometap does not have a FICO credit score requirement).
- You have a minimum of 25% equity in your home.
- The investment amount you’re looking for is under 30% of your total home value or under $400,000 (this is the maximum amount Hometap can invest. However, the entire process depends on your home valuation and equity percentage, as well).