Hometap could give you up to $600,000 of your home’s equity with no monthly payments and no interest. Homeowners with credit scores from 575 and at least 25% equity could qualify, among other qualifying criteria, if the home is located in an eligible state.
What a home equity agreement is
A home equity agreement (also called a home equity investment) is not a loan. A company gives you cash today in exchange for a share of what your home is worth later. There is no interest, no monthly payment, and nothing added to your debt to income ratio.
You settle once, when you sell the home or when the term ends, by paying the company’s share of the home’s value at that time. Terms run 10 years at Hometap and JG Wentworth, and up to 30 years at Unison, Point, and Splitero.
That structure is exactly why it exists: it is built for homeowners who have real equity but do not want, or cannot qualify for, another monthly payment.
How a home equity agreement works
Enter your address and what you think the home is worth. Two minutes, a soft credit check, and you see how much a company could offer.
The company reviews your equity position and comes back with the cash amount and the share of future value it wants in return. Compare that share between companies.
If you move forward, the home is valued by an appraiser or an automated model and the terms are finalized. This is where the estimate becomes a real number.
Money lands in your account, usually within a few weeks. No monthly payment starts, because this is not a loan.
Any time within the term you sell, refinance, or pay in cash. The company receives its agreed share of the home’s value at that point, and the lien comes off.
Pros and cons at a glance
Pros
- No monthly payments. Your cash flow does not change at all
- No interest. Nothing compounds against you while you hold it
- Credit is not the gatekeeper. Floors run from about 500 at Point and Splitero to 600 at JG Wentworth
- Self employed friendly. Several providers have no income requirement at all
- Some providers share the downside. If your home loses value, you can owe back less than you received
- No restrictions on the money. Debt payoff, renovation, business, medical, anything
Cons
- You give up future appreciation. The faster your home rises, the more the agreement costs you
- Fees come off the top. Roughly 3 to 5 percent origination plus an appraisal, so you net less than the headline
- The clock matters. You must settle by the end of the term by selling, refinancing, or paying cash
- State restricted. Each provider covers a different list of states
- The house is collateral. A lien goes on the home, and you still carry taxes, insurance, and upkeep
If the cons sound like you, price a HELOC instead
Giving up appreciation only makes sense when a payment is impossible. If you can carry one, Figure is the HELOC to price first.
A fully online line from $15,000 to $750,000, approval in about five minutes, funding in as few as five days, and a soft pull to see your rate. You keep every dollar your home gains.
What it really costs: a plain example
Say your home is worth $400,000 and a provider gives you $40,000, which is 10 percent of the value, in exchange for roughly a 16 percent share of the home’s future value. Most companies price between 1.6 and 2 times the slice you take, so the exact share is the first number to compare.
Now run the same ten years as a HELOC at today’s rates and you would pay interest monthly the entire time, likely landing in a similar total cost range, except the HELOC required a payment every single month and a credit profile good enough to get approved.
That is the entire decision: pay as you go with a loan, or pay at the end with your home’s growth. Numbers vary by provider and by home. We ran the full ten year math in every market scenario in our JG Wentworth review, and the fee breakdown for the biggest provider in our Hometap review.
Get a real number from Hometap
The estimate is free, takes a couple of minutes, and does not affect your credit. Compare the share Hometap wants against a second company before you decide anything.
Get My Free Hometap Estimate →No obligation, no credit impactDo you likely qualify?
Most providers look for at least 25 percent equity in your home, and 40 percent or more is where offers get meaningful. Credit runs from about 500 at Point, Splitero, and Nada to about 575 to 620 at Hometap, JG Wentworth, and Unison, far below HELOC requirements.
The home needs to be a primary residence or second home in an eligible state, and some providers also take rentals. Income is checked lightly or not at all, which is why self employed homeowners end up here.
Not sure what your equity is worth? Run the rough numbers first.
Check your estimate →Home equity agreement vs HELOC
A home equity agreement is one of several ways to skip the HELOC. We rank all of them in our best HELOC alternatives guide.
If a payment is possible for you, price the HELOC first. Figure shows a rate with a soft pull, and our best HELOC lenders guide covers the rest.
| Home equity agreement | HELOC | |
|---|---|---|
| Monthly payment | None | Required, variable |
| Interest | None | Accrues the whole term |
| Credit needed | About 500 to 620, by provider | Usually 620 to 680 or higher |
| Income documentation | Minimal, often none | Full underwriting |
| Keep all appreciation | No, you share it | Yes |
| Cheapest when | Home grows slowly | Home grows fast |
| Get a Hometap estimate → | Check my Figure rate → |
Who should actually do this
It fits if
- You have a lot of equity but cash or credit is tight
- You are self employed with income that is hard to document
- A lump sum would erase high interest debt
- You want cash without touching your monthly budget
- You have a realistic path to settle within the term, usually a sale or a refinance
Look elsewhere if
- You expect strong appreciation and want all of it
- You comfortably qualify for a cheap HELOC
- You have no idea how you would handle the buyout at the end
- You have less than 25 percent equity
- Your state is not covered by any provider
If you land in the right column, check Figure’s rate → with a soft pull before you decide. If speed is the constraint rather than credit, our guide to getting a home equity loan fast covers what funds quickest.
Which companies fund your state
State availability is the most common reason people get disqualified before anything else is looked at. Here is the footprint of each provider we have reviewed, so you can skip the ones that cannot fund you.
| Provider | Footprint | Term | Credit floor | Our take |
|---|---|---|---|---|
| Point | 29 states plus D.C. | Up to 30 years | About 500 | Point profile |
| Unlock | 26 states | 10 years | About 500 | Unlock review |
| Unison | 22 states plus D.C. | Up to 30 years | About 620 | Unison review |
| Hometap | 27 states | 10 years | 575 | Hometap review |
| JG Wentworth | 16 states plus D.C. | 10 years | 600 | JG Wentworth review |
| Splitero | 17 states | Up to 30 years | About 500 | Splitero review |
| Nada | 12 states | 10 years | About 500 | Nada profile |
Coverage lists change, so confirm on the estimate form. Our best home equity investment companies roundup has a state filter that does this in one click.
The three providers to get quotes from
Offers differ meaningfully between companies on the same house, so the move is to get two or three free estimates and compare the share each one wants.
Hometap is our top pick, Point covers the most states with the lowest credit floor, and Unison shares in losses if your home value falls. None of them affect your credit.
Top pick
Top pickJG Wentworth is the fourth one worth a number if your credit sits around 600 and you want no income requirement, though it only covers 16 states plus D.C. Our JG Wentworth review has the terms, the real cost, and who qualifies.
We went deeper on the terms and fine print in our Hometap review and our Unison review, we put the two biggest head to head in Hometap vs Unison, and Point’s full profile sits in our best home equity investment companies roundup. If you are choosing between a 10-year and a 30-year term, see Hometap vs Point.
Frequently asked questions
My final take
A home equity agreement is the right tool for a narrow reader: real equity, a payment they cannot add, and a specific use for the money. For that reader it is often the only way to reach the equity at all.
For everyone else, especially anyone who can carry a HELOC payment, it is expensive money in a rising market. The share you give up is the whole decision, so get two or three numbers and compare that share before you sign anything.
Hometap: our top pick for a home equity agreement
Up to $600,000 of your equity with no monthly payments, a 10 year term, credit from 575, and a free estimate that does not affect your credit. Homeowners with at least 25% equity could qualify, among other criteria, in an eligible state.
Where to go next
Reading is free, and so are the estimates. These are the three companies to pull a real number from before you decide anything.
Not sure which fits? Our home equity calculator takes your state, equity, and credit and tells you in two minutes. Then compare every provider by state in our best home equity investment companies roundup.
Read the company reviews side by side: Hometap, Unison, Splitero, Unlock, and JG Wentworth. If a payment is possible for you, price the cheaper route first with our Figure HELOC review, our best HELOC lenders guide, and our list of HELOC alternatives.
