Thinking About a Home Equity Investment? Here’s What to Know First

If you’ve built up meaningful equity in your home and could use some extra flexibility, you’ve probably come across something called a Home Equity Investment (HEI).

Also known as an equity sharing agreement, an HEI allows you to access a lump sum of cash from your home’s equity without taking on traditional monthly payments. Instead of charging interest, the provider receives a share of your home’s future value when you sell, refinance, or reach the end of the agreement term, which is usually somewhere between 10 and 30 years.

Zero interest? Zero monthly payments? It’s easy to see why that gets homeowners’ attention. But while equity sharing can be a great solution for many, it’s important to be mindful of the structure behind the scenes. Hidden details could cost you thousands!

Today, the HEI market is largely led by four companies — Unison, Point, Hometap, and Unlock. Each has its own approach to pricing, term length, and risk-sharing.

So, if you’re considering an HEI, here are five questions worth asking before you move forward.

1. How exactly is repayment calculated?

Some providers take a share of your home’s total future value. Others take a share of the appreciation only. That distinction may sound technical, but it can have a huge impact.

Rather than focusing on the headline percentage, ask for real-world examples. What would repayment look like if your home appreciates modestly over 10 years? What if it grows faster than expected? What if appreciation is minimal?

A provider that believes in its model should be comfortable walking through multiple scenarios with you — clearly and patiently.

2. What “risk adjustment” are you applying to my home?

Most HEI providers apply what’s called a risk adjustment to your home’s appraised value at the start of the agreement. In practical terms, they discount the starting value of your home before calculating future appreciation.

Across the industry, that adjustment can range from just a few percentage points to nearly 30 percent. Here’s why that matters:

Let’s say your home is worth $500,000 today and later sells for $600,000. Below is how different risk adjustments can affect the math.

Example: $500,000 Home → Sells for $600,000 (20% Share)

Provider Calculation Overview

In this simplified example, the difference in risk adjustment alone can mean roughly $22,000 more owed at settlement.

3. How long is the term, and what happens at the end?

HEIs are long-term agreements, and term length varies meaningfully across providers.

Some offer 10-year terms. Others extend to 30 years. A shorter term might be fine if you already plan to sell within that window. But if your life plans shift — and they often do — you’ll want to know what happens when the agreement matures.

Are extensions available? Is refinancing required? Would you be forced to sell?

Unison offers a 30-year term, which can provide additional flexibility for homeowners who want time on their side rather than a countdown clock.

4. Do you share in losses if my home declines in value?

Housing markets are not a straight line upward. If your home were to decrease in value, does the provider share in that loss? Or are there conditions that limit downside participation?

A true equity partnership means sharing both appreciation and depreciation. That’s why, after five years, Unison shares in both gains and in most cases, losses. As always, ask every provider exactly how they handle depreciation and under what conditions.

5. What happens if I improve my home?

Let’s say you remodel your kitchen or add square footage. You’ve invested your own capital to increase your home’s value. Should the provider share in that portion of appreciation?

Some HEI providers allow for documented capital improvements and adjust the final settlement calculation to let you keep more of the appreciation you’ve contributed to. Others may be more restrictive.

With Unison, homeowners can apply for a remodeling adjustment after three years on qualifying improvements. That means the value created by your renovations can be excluded from Unison’s share, allowing you to keep what you’ve built.

What Makes Unison Different?

To bring this together, here’s a simplified look at how Unison stands out within the HEI market.

Homeowner Advantages

• Lower Risk Adjustment (5%)
• Gain-and-Loss Sharing
• 30-Year Term
• Remodeling Adjustment
• Shares Only In Future Change

Unison is also a pioneer in the equity sharing business –– having been first to market in 2006 and serving more than 12,000 homeowners in the decades since. Its approach is built around genuine long-term alignment, rather than short-term pressure.

So, What’s The Bottom Line?

In certain situations, a Home Equity Investment can absolutely be a smart tool. For the right homeowner, it can unlock flexibility without layering on another monthly payment.

But the details matter. When you look at the full picture — risk adjustment, loss sharing, term length, and how improvements are treated — the differences between providers start to matter a lot more than the headline percentage.

That’s where Unison has built its reputation.