At a Glance

Hometap offers homeowners a unique way to access their home equity without taking out a traditional loan. Instead of borrowing, Hometap provides a lump sum of cash in exchange for a percentage of the home’s future value. There are no monthly payments, and homeowners settle when they sell their home or reach the end of the agreement term.

Key Figures

● Loan Types: Home equity investment

● Loan Products: Equity-sharing agreements

● Minimum Credit Score: 550

● Repayment Terms: Up to typically 10 years

Pros & Cons

Hometap offers an innovative alternative to home equity loans or HELOCs. The lack of monthly payments makes it an appealing option for homeowners who need liquidity. However, the repayment structure is based on the future value of the home. A Hometap Investment features a cap that is designed to protect your interest in your property — and limits the Hometap Share to an annualized 20% rate of return on the original investment amount, which is prorated to the date of the Investment settlement. This cap places a limit on your maximum repayment amount when you settle, keeping more of your equity in your hands.

How it Works

Homeowners apply online by providing basic property and personal information. If approved, a third-party appraiser determines the home’s current value. Once the investment agreement is finalized, Hometap provides funds in a lump sum. Homeowners settle the agreement by repurchasing Hometap’s share or selling the home within the term.

Types of Loans

Hometap does not offer traditional loans but rather home equity investments. Homeowners receive cash in exchange for a percentage of their home's future value. This is not a loan, so there are no monthly bills. Instead, repayment is structured based on home value appreciation or depreciation at the time of settlement.

Loan Features

• No Monthly Payments: Unlike traditional loans, Hometap requires no monthly payments.
• Flexible Qualification: Homeowners are assessed on a number of attributes including home value and equity.
• Quick Funding: Once approved, funds are typically available within 3-6 weeks.
• Settlement Based on Future Home Value: Repayment is tied to the appreciation or depreciation of the home.
• No Usage Restrictions: Homeowners can use the funds for any purpose, including debt consolidation, home improvement, or other expenses.

Rates and Terms

Hometap’s agreements must be settled within 10 years. At the end of the term, homeowners must settle by either buying out Hometap’s share or selling their home. Since Hometap’s investment is based on the home value, the final repayment amount will vary depending on market conditions.

The amount you repay is linked to your home’s value when you submit payment. If the property appreciates, the cost may be higher, and vice versa. The percentage of the home’s value Hometap receives doesn’t change—it’s just a higher total amount if the value of the home is higher.

Many homeowners typically take out 10% of their home value at the start of the Investment.

This means those homeowners would owe between 15% to 20% of their final home value at the

time of settlement, depending on how long they hold the Investment.

If your home’s value goes up or stays the same, it pays to settle the Investment faster. If you

were to take out an Investment equal to 10% of your current home value, and then settle in:

• 0 – 3 years: Hometap gets 15% of your home’s future value.
• 4 – 6 years: Hometap’s share goes up to 17.8%.
• 7 – 10 years: Hometap will get 20%.

If your home’s value goes down: Hometap’s share remains at 15%, no matter when you pay.

Summary

Hometap provides a debt-free way to access home equity by offering homeowners cash in exchange for a share of their home’s future value. The absence of monthly payments and income requirements makes it an attractive alternative to loans or HELOCs. However, homeowners should consider the impact of home appreciation on the final settlement amount.

Contact Hometap

• Website: www.hometap.com
• Support Email: support@hometap.com
• Phone: (617) 213-6764
• Headquarters: 75 Arlington St Suite 500, Boston, MA 02116

Disclaimer

AI was used in the generation of this content, along with human verification.