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 share of your home's value at the end of the agreement. You can settle the agreement at any time during its 10-year term by selling your home, refinancing, or buying out Unlock's share with cash on hand. As an alternative to a home equity loan, Unlock has no monthly interest payments and doesn't require monthly payments. However, like a home equity lender, it does check your credit and how much equity you have, and it charges an origination fee. Unlock currently operates in 26 states.

Key Figures

Product Types: Home equity

Products: Home equity agreement (alternative to home equity loan)

APRs start from: N/A

Minimum credit score: 500

Funding amounts: $15,000 to $500,000

Term: 10 years

Unlock's minimum credit score is 500, much lower than the minimum of around 620 that's typical for a regular home equity loan. Getting funded by Unlock doesn't release you from your normal housing obligations. During the HEA term, you must keep making your mortgage payments and stay current on property taxes, homeowners insurance, HOA fees and any other housing costs.

The flip side of Unlock's funding model is that you may be giving up a large amount of money in the future. The bigger the funding amount and the more your home appreciates, the more you'll owe. You could end up paying Unlock significantly more when you settle than you received at the start. To limit this, Unlock caps its return at 19.9% per year, or lower where state law requires.

How It Works

Unlock invests in most residential real estate, including single-family homes, condominiums, townhomes and 2–4 unit properties. It accepts primary residences, second homes and rental properties. It doesn't invest in co-ops, tenancy-in-common (TIC) properties, raw land, mobile homes or manufactured housing.

Unlock currently operates in Alabama, Arizona, California, Florida, Hawaii, Idaho, Indiana, Kentucky, Michigan, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Vermont, Virginia, Wisconsin and Wyoming.

To qualify, you'll generally need to meet these requirements:

• A minimum credit score of 500
• At least 30% equity in your home, meaning your total mortgage debt can't be more than about 70% of your home's value
• A home value between $175,000 and $3 million
• A property in reasonable condition, rated C4 or better on the standard appraisal scale
• No bankruptcy, foreclosure, short sale or deed in lieu of foreclosure in the past five years
• No more than one 90-day late mortgage payment in the past two years

Unlock doesn't verify income, although you'll need to show rental income if the property is an investment property.

Pre-qualifying takes less than two minutes. To get started:

1. Enter your property address and contact details to see if you pre-qualify.
2. Complete a short online application. Unlock runs a soft credit check, which won't affect your credit score.
3. Review your estimated terms with an Unlock representative.
4. Accept your final offer after a third-party appraisal, inspection and title review.
5. Receive your funds.

The whole process typically takes 30 to 60 days, depending mainly on how quickly the appraisal and inspection are completed.

Shared Equity Product

Unlock is a real estate investor, not a lender. It pays you cash today in exchange for a share of your home's value when the agreement ends.

Funding amounts range from $15,000 to $500,000. Your final amount will depend on your home's value, how much you currently owe on it, your credit history, and whether the home is your primary residence, a second home or a rental.

For example, on a $600,000 home you might receive around $60,000, or 10% of the home's appraised value. In exchange, Unlock would take a larger percentage of your home's value when you settle. The exact percentage is set out in your offer, so review it carefully.

Although Unlock isn't a lender, it does charge an origination fee of up to 4.9% of the funding amount, subject to state law. You'll also pay third-party costs such as the appraisal, title, escrow and recording fees.

You can buy out Unlock's share at any time without selling your home, with no prepayment penalty. The buyout amount is based on an independent third-party appraisal that you pay for, and you'll need to give Unlock at least 60 days' notice. You can also make partial buyouts during the term. These are subject to Unlock's approval and require a new appraisal each time.

Features

The HEA is Unlock's flagship product, and it's the only home equity product described in this review.

Rates and Terms

Instead of interest, the cost of an Unlock HEA is a share of your home's value at the end of the agreement. The more your home appreciates during the term, the more you'll pay when you settle. If your home loses value, Unlock's share generally shrinks too.

Unlock's pricing depends on your home's value, your existing mortgage debt, your credit history and how the property is used. Rental properties typically receive less favorable pricing than primary residences.

Your cost is also capped at a maximum of 19.9% per year on Unlock's investment, or lower where state law requires. The cap protects you if your home's value rises quickly or you settle early.

Summary

Unlock offers an interesting alternative to a home equity loan or home equity line of credit (HELOC). If you own your home but can't afford monthly payments, or don't want the risk that comes with them, Unlock can be a strong option. On the flip side, you may end up paying Unlock a large amount in the future, especially if your home appreciates significantly. Whether Unlock makes sense for you depends on your financial situation, so look carefully at the numbers before making a decision.

Contact Unlock

Unlock is based in Tempe, Ariz. To speak with a home equity consultant, call 1-800-560-3450 (Monday–Friday, 9 a.m. to 8 p.m. ET). You can also email hello@unlock.com.

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