* This table offers interest rates (updated daily) for various loan products, sourced from Bank Rate. See “Disclaimer” below.
The chart above is broken into two sections. The top section contains calculations to your “Likely Term” (LT), which is how long you think you will keep the product before paying it off. The bottom section assumes that you will keep the product to its typical “Max Term” (MT).
Rates, costs, and terms shown here are for informational purposes only and may vary. We are not a lender or investor and information here is not a commitment to lend or invest in a property. Actual prices and terms differ based on individual circumstances. Please contact a lender or HEA/HEI company of your choice for precise home equity product information.
*Approximate FICO Score Required: The figures shown in the chart are an average and may be lower or higher depending on the provider.
"NOT MADE" is the estimated debt payment(s) a homeowner did not make, or saved, because the product does not require payments. This field assumes the homeowner could qualify for a market rate Closed-End Second (CES) mortgage, which is not always the case. It also does not account for the homeowner reinvesting their payment savings into a home remodel or other assets that appreciate over the Likely Term (LT) or Max Term (MT).
All the results are generated through our proprietary product pricing, and eligibility engine (PPE).
Results shown here assume a second lien at no more than 80% CLTV (Combined Loan/Lien to Value).
HEA: Assumed less than 80% CLTV, 2.0 Exchange Rate, 19.95% Annualized Cost Limit (“Safety Cap”)
HEI: Assumed less than 80% CLTV, 20.0% Investor House Value “Risk Adjustment”, 3.5X Equity Share Investor Multiple (3.5*LTV), 19.95% Annualized Cost Limit (“Safety Cap”)
SAM: Assumed less than 80% CLTV, 4.25% Negatively Amortized Interest Rate, 3X Shared Appreciation (3*LTV), 15% Annualized Cost Limit (“Safety Cap”)
HEA and HEI are not offered in every state. Please contact your provider for more information.
Sources: Bank Rate, Federal Reserve, HomeEquity.Exchange, other public/private sources.
Home Equity Agreement (HEA): An HEA is a non-debt real estate finance product that enables homeowners to monetize a portion of the equity in their home without taking on additional debt, monthly payments, or credit report reference. Instead of a traditional loan, the homeowner receives a lump sum of cash in exchange for a predetermined share of the “present and future value” of their property. HEA's typically have 10-to-15-year terms and are secured by the subject property with a security instrument such as a Deed-of-Trust recorded in 1st, 2nd, or 3rd position.
Home Equity Investment (HEI): An HEI is a non-debt real estate finance product that enables homeowners to monetize a portion of the equity in their home without taking on additional debt, monthly payments, or credit report reference. Instead of a traditional loan, the homeowner receives a lump sum of cash in exchange for a predetermined share of their property’s future appreciation, calculated from a reduced "baseline" amount sometimes called “Starting Property Value”. HEI's typically have 30-year terms and are secured by the subject property with a security instrument such as a Deed-of-Trust recorded in 1st, 2nd, or 3rd position.
Shared Appreciation Mortgages (SAM): A SAM is a type of mortgage debt product by which borrowers agree to share a portion of their future home price appreciation with the lender in exchange for a lower interest rate, no monthly payments, or other favorable terms. The appreciation share is typically calculated as a percentage of the increase in the home's value from the time of the SAM is taken out to the time of sale or refinance. SAM's typically have 10-to-15-year terms and are secured by the subject property with a security instrument such as a Deed-of-Trust, generally recorded 2nd position.
Home Equity Line of Credit (HELOC): A HELOC is a debt product that functions as a revolving line of credit. Borrowers can draw from the line of credit up to a maximum limit and make interest-only monthly payments, typically for a set term (the "draw period") of about 10-years, after which fully amortized repayment must begin that can last from 10-to-20 years. HELOCs are secured by the subject property with a security instrument such as a Deed-of-Trust generally recorded 1st or 2nd position.
Closed-End Second Mortgages (CES): A CES is a mortgage debt product used in addition to the first mortgage. It allows homeowners to access the equity in their home in a lump sum without refinancing the first mortgage. CES typically require fully amortized monthly payments and are secured by the subject property with a security instrument such as a Deed of Trust, generally recorded in 2nd position.
Credit Cards: Credit Cards are unsecured lines of credit (debt) issued by financial institutions that allow cardholders to borrow funds up to a preset limit. Cardholders can make purchases, balance transfers, or cash advances using the credit card, and are required to pay back the borrowed amount either in full by the due date or over time with interest. Credit Cards are included in this “Home Equity” analysis tool because homeowners frequently use them for debt consolidation, home remodeling, and other purposes common to HEA, HEI, and home equity debt products.