Equity Share: Tap Your Home's Value - with a Partner, Not a Traditional Loan

How an Equity Share Works With an Equity Share agreement:

• You receive a cash payment upfront in exchange for a portion of your home's future value or appreciation.
• There are no required monthly payments, and you remain the homeowner.
• You continue to pay property taxes, homeowners insurance, maintenance, and any existing mortgage. (Consumer Financial Protection Bureau)
• At the end of the term or when you sell the home (or trigger an event), you must pay your partner back - based on a percentage of your home's value or appreciation.

What an Equity Share Can Do for You

• Access cash without a monthly bill: This can free up funds for home improvements, debt consolidation, or life goals - while keeping your current mortgage intact.
• Flexibility for homeowners who may not qualify for traditional loan refinancing: Some equity-share options have more relaxed income or credit requirements. (Experian)
• Preserve ownership and occupancy: You remain owner and occupant, with no monthly payment obligations to the investor-partner.

Important Trade-Offs & Why It May Be Less Favorable Than a Reverse Mortgage

While the no-monthly-payment feature is attractive, there are several aspects where Equity Share differs from, and may be less advantageous than, a proper reverse mortgage. You'll want to understand these fully:

1. Uncertain future cost

Because the repayment is tied to home value/appreciation, your ultimate cost is not fixed. If your home value increases significantly, you may pay far more than the cash you received. For example, regulatory research shows that home-equity contracts can lead to settlement amounts growing at 19-22% annually in early years. (Consumer Financial Protection Bureau) By contrast, many reverse mortgages have clearer fee and interest structures and are regulated and insured when they are federal (e.g., HECM) programs.

2. You're sharing upside

With an equity share you give up a portion of your future appreciation. So while you get liquidity now, you also sacrifice some future value growth. In a traditional reverse mortgage (especially federally insured), you often retain all the home's upside (subject to interest accrual).

3. Fewer protections & shorter term clarity

Equity share agreements are younger, less regulated, and disclosure standards are inconsistent. (Consumer Financial Protection Bureau) There may be a fixed term (e.g., 10-30 years) after which a balloon or sale-trigger occurs. If you stay in the home longer, your partner may expect large payback. A HECM (for age 62+) is insured, has regulatory protections, and your payment obligations are clearer.

4. Continued home-ownership responsibilities remain

Even though there's no monthly payment to the investor, you still must continue paying property taxes, homeowners insurance, upkeep, and you must occupy the home as your principal residence - just like a reverse mortgage. If you fail, you could lose the home. (Consumer Financial Protection Bureau)

5. Limits on refinancing or other debt

Having an equity share lien or agreement may make refinancing your mortgage or taking out other home-secured debt harder. The presence of the partner-lien can complicate future financial moves. (Consumer Financial Protection Bureau)

Is an Equity Share Right for You?

You might consider this option if:

• You own a home with substantial equity.
• You want access to cash now, but you're comfortable giving up some future home value.
• You prefer no monthly payment obligation and/or have credit/income constraints that limit other options.
• You're comfortable planning how you'll repay the partner share later (via sale, refinance, or other means).

You might prefer a regulated reverse mortgage (for eligible seniors) or other equity access product instead if:

• You want to preserve as much future value as possible.
• You want a predictable structure and stronger consumer protections.
• You’re 62 or older and qualify for a federal reverse mortgage (HECM) which may offer a safer alternative.

Ready to Explore Your Options?

Because every homeowner's situation is different, we'll help you compare the Equity Share option and other equity-access products like reverse mortgages, HELOCs, and proprietary reverse options. We'll model your home value scenario, estimated cost, future impact on legacy, and repayment obligations - so you can decide with full clarity.