At a Glance
Unison offers an alternative to traditional home equity loans through its innovative Equity Sharing Home Loan. This second mortgage product provides access to home equity at below-market, fixed interest rates, with reduced monthly payments and no prepayment penalties. Homeowners can benefit from flexibility, capital improvement adjustments, and a capped shared appreciation model over a 10-year term.
Pros and Cons
Pros
- Reduced monthly payments
- No prepayment penalties
- Capital improvement adjustment
- Shared appreciation capped
- Below-market, fixed interest rates
Cons
How it works
The Unison Equity Sharing Home Loan is structured as a 10-year, fixed-rate, interest-only second mortgage. It differs significantly from traditional home equity loans or lines of credit by offering below-market, fixed rates and a shared appreciation component.
When you take out this loan, you pay 75% of the interest monthly, while the remaining 25% is deferred until the end of the term. The loan ends with a balloon payment that includes the principal, any deferred interest, and shared appreciation, unless you prepay earlier.
Here’s how the process works:
- Pre-approval: Complete a quick online form to determine initial eligibility with no credit impact.
- Full application: Proceed online or through a Unison Mortgage Loan Officer.
- Appraisal: A third-party appraiser determines the starting home value.
- Offer and signing: You receive an offer, sign the closing package, and prepare for funding.
- Funding: Funds are wired to you, typically within three business days of closing.
- Settlement: At the end of 10 years or upon sale or prepayment, you repay the principal, deferred interest, and a share of appreciation if the home increased in value.
Loan Features
- 10-Year Term: Fixed Interest-only loan, repaid at end of term.
- Partially Deferred Interest: 25% of interest deferred and compounded.
- Capital Improvement Adjustment: Available after 3 years for qualifying renovations.
- Deferred Maintenance Adjustment: Applied if neglect reduces property value.
- Shared Appreciation: Borrowers share future appreciation; usually 1.5x the percentage of borrowed equity.
- Appreciation Cap: Limits Unison’s share to remain within state interest ceilings.
- Prepayment Flexibility: Full prepayment allowed anytime, with no penalties.
Rates and Terms
Unison charges below-market, fixed interest with a unique payment model. Borrowers pay 75% of interest monthly, with the remaining 25% deferred and compounded. Shared appreciation—calculated as a fixed percentage of any home value gain—is added only if the home increases in value. Total repayment includes the original principal, deferred interest, and capped shared appreciation. If the home depreciates, Unison does not absorb losses.
Contact Unison
Unison supports a streamlined, digital application process and customer service by phone.
- Phone: 855-864-7664
- Headquarters: 4 Embarcadero Center, Suite 71, San Francisco, CA 94111
- Website: www.unison.com
Unison is accredited by the Better Business Bureau. Reviews on platforms like Trustpilot highlight its transparent process and responsive support. Borrowers are encouraged to consult Unison's Home Partnership Team for guidance on eligibility, maintenance, and improvements.
Summary
Unison’s Equity Sharing Home Loan provides a compelling option for homeowners seeking to unlock their equity without the burden of high monthly payments. With unique features like deferred interest, capped shared appreciation, and flexibility for improvements, it appeals to those looking for affordable, risk-mitigated equity access. Just be sure to meet the eligibility criteria and understand the repayment structure.
Disclaimer:
AI was used in the generation of this content, along with human verification.
