At a Glance

Unlock is a real estate investor. Through the company’s home equity agreement (HEA), you can receive a lump sum, in exchange for a portion of your home’s future value. At the end of the HEA’s 10-year term, you can pay off your agreement by selling your home or using cash on hand. As an alternative to home equity loan providers, Unlock doesn’t charge any interest and doesn’t require monthly payments. However, like a home equity loan provider, it does check your credit score and LTV ratio and it does charge an origination fee for its services. Unlock currently operates in 13 states and plans to add more states in the future.

Key Figures

Loan types: Home equity

Loan products: Home equity agreement (alternative to home equity loan)

APRs start from: N/A

Minimum credit score: 500

Repayment terms: N/A

The best thing about Unlock is that it’s not a loan. As a result, there is no interest, no monthly payments, no income requirement, and (almost) no credit requirement. Well, there is a minimum credit score, but it’s 500 – much lower than the minimum 620 required for a regular home equity loan. Getting funded by Unlock doesn’t release you from your normal housing obligations.

During the 10-year HEA term, you must continue to make mortgage payments as well as stay current with property taxes, property insurance, HOA fees and any other housing obligations.

The flipside to Unlock’s funding model is that you may be giving up a large amount of money in future. The higher the amount, the larger the discrepancy – and you may end up paying a lot more to Unlock upon the sale of your home than Unlock paid you when you first got funded.

How It Works

Unlock invests in most residential real estate (single family, condominiums, 2-4 unit properties, and townhomes) including both owner and non-owned occupied properties. It currently operates in Arizona, California, Florida, Michigan, North Carolina, New Jersey, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Virginia and Washington State.

The minimum credit score is 500. The maximum LTV is 80% (i.e. your current mortgage debt must not be higher than 80% of your current appraised property value). In most cases, there is no income requirement.

It only takes a few minutes to find out if you qualify and see how much of your equity you can unlock.

To get started:

• Provide your property address
• Review your property’s value and update if the automated estimate is incorrect
• Enter your name, email address and phone number

From there, you’ll be automatically logged into the Unlock dashboard, where you can authorize a soft credit pull and choose which investment amount makes sense for your situation.

Types of Loans

Unlock is a real estate investor, not a lender. The way Unlock works is that it pays you, in cash, for the right to a share in the proceeds from the future sale of your home.the future value of your home.

Funding amounts range up to $500,000, although the final funding amount will depend on a variety of factors including, home value, credit, current debt held against the home and Unlock’s lien position.

In a typical transaction, you could get approximately 10% of your home's current appraised value for giving Unlock approximately 18% share of your future value.

Although Unlock isn’t a lender, it is similar to lenders in one respect – it charges an origination fee of 4.95% of the funding amount. You will also need to pay any required third-party expenses to appraise, inspect, and record your Unlock transaction.

Oh, and one more thing: if you want, you can buy out Unlock’s share without selling your home. home. The amount you pay Unlock will be determined by an independent third-party appraisal that you pay for. There is no prepayment penalty for buying out Unlock’s share. You can also make partial payments during your HEA term.

Loan Features

Unlock only offers one product – an HEA, which we described above. It doesn’t offer any other products or services.

Rates and Terms

If you’ve made it this far, you’ll know that the price for getting funded by Unlock is a share of your home’s future value, not interest. Unlock’s share is determined by the appraised value of your home. It isn’t impacted by how much you owe on your home (unless you owe more than 80% of the appraised value, in which case you won’t qualify), where you live, or your income. Your credit score has only a minimal impact on Unlock’s share, e.g., a homeowner with 500-619 credit may have different final terms when compared to a homeowner with 620+ credit.

Summary

Unlock provides an interesting alternative to a home equity loan or home equity line of credit (HELOC). If you own your own home but can’t afford or don’t want the risk of monthly payments, then Unlock is obviously a better option than a traditional home equity loan or HELOC. On the flipside, you may end up having to pay Unlock a large amount in future. Whether or not Unlock makes sense for you depends on your financial situation, so make sure to look carefully at the numbers before making a decision.

Contact Unlock

Unlock is based in Tempe, Ariz. To speak with an Unlock consultant, call 844-314-1435 (Monday-Friday, 9 a.m. to 8 p.m. EST). You can also reach out by sending an email to hello@unlock.com.