Can You Sell Equity in Your Home? 3 Home Equity Facts

by | Apr 3, 2020

Advertising Disclosure

Any opinions, analyses, reviews or recommendations expressed in editorial content are of the author alone, and have not been reviewed, approved, or otherwise endorsed by the advertiser. We make every effort to provide up-to-date information, however we do not guarantee the accuracy of the information presented. Consumers should verify terms and conditions with the institution providing the products. Articles may contain some sponsored content, content about affiliated entities, or content about clients in the network.

Editorial Note

LowerMyBills is compensated by third-party advertisers, however, any opinions, analyses, reviews or recommendations expressed in editorial content are of the author alone, and have not been reviewed, approved, or otherwise endorsed by the advertiser. While reasonable efforts are made to maintain accurate information, the information is presented without warranty.

Americans are facing a total mortgage debt of $15.8 trillion. The good news is that as borrows pay their mortgage down, they build equity in their home. 

As you build equity in your home, you build a financial resource that you can then tap into later. Curious how you can make your home equity work for you? Then you need to read the answers to these three questions.

1. Can You Sell Equity in Your Home?

Yes, you can typically sell a portion of the home equity you have built-in your home.  Keep in mind, if the value of the home increases, then both you and the equity buyer benefit. But if the home’s value drops, then you both suffer the consequences. 

2. What Are the Pros and Cons of Selling Equity in Your Home?

As with any financial products, there are pros and cons to moving forward. The most significant benefit of this arrangement is that you can receive immediate payment for your real estate equity. This is especially helpful if you need the money quickly. 

You also don’t have to make monthly payments. This can make it a better option than other home financing options such as a home equity line of credit or second mortgage. 

One drawback of this arrangement is the fees. You’ll need to pay for an appraiser to visit your home, which can cost several hundred dollars. Then there’s a processing fee and escrow costs. 

This option may be more expensive than a home equity loan. So it’s best for homeowners to run the numbers before choosing to sell their equity. You may find that quickly rising property values and low-interest rates make other options more affordable. 

3. What Is Point.Com and Is It a Good Option?

When you work with Point.com, you receive a lump sum cash payment deposited into your bank account in return for allowing Point.com to invest in your home. This isn’t a typical loan, so there are no monthly payments. 

This is an interesting option because it allows you to leverage your built-up equity to pay off debt, build a safety net, home improvement, or pay an unexpected expense. You then have the option of buying back your equity at any point during the 30-year term.

 Start Using Your Home’s Equity Today 

If you have a large amount of equity built-up in your home, then selling your home equity can be an option for you. Start by evaluating your current financial situation, find out what your market value is for your piece of real estate and determine how much you need.

Then consider your options and calculate the cost of each. If selling your equity makes financial sense, then consider filling out an application at Point.com. 

Use our mortgage analysis tool to find out what working and what isn’t with your home loan.

Latest Articles

Home Buying Inspection: The Complete Guide
Home Buying Inspection: The Complete Guide

Looking at houses, imagining them as your own, is exciting. Arranging your furniture in your mind's eye and thinking about putting down roots is all a part of the home buying process.  But some more daunting steps are part of the process too. Saving for a...

USDA Home Loan Requirements Explained
USDA Home Loan Requirements Explained

Millions of people buy homes each year. More than 5.34 million houses sold to new owners in 2019 alone. While many of those buyers financed their homes with conventional mortgages, others turned to federally-backed loans to help them get into the house of their...

Pros And Cons Of A No Closing Cost Refinance
Pros And Cons Of A No Closing Cost Refinance

With mortgage rates at extremely low levels, the desire to refinance has never been stronger. If you're thinking of refinancing your home, is a no closing cost refinance the right option for you? Read on to learn more about this type of financing and the pros and cons...

Beware! Banks Are Tightening Their Lending Standards?
Beware! Banks Are Tightening Their Lending Standards?

The Federal Reserve dropped interest rates to 0 percent to stimulate the economy during COVID-19. It's a move last seen during the 2008 housing crisis after the economy collapsed due to poor lending standards and subprime mortgages. Slashed interest rates might make...

What is a Home Equity Conversion Mortgage?
What is a Home Equity Conversion Mortgage?

A Home Equity Conversion Mortgage (HECM) is a type of mortgage that is insured by the Federal Housing Administration (FHA) and was passed by Ronald Reagan in February 1988. HECMs are more commonly known as a Reverse Mortgage and is something that is only offered to...

How to Prepare to Buy a House in One Year
How to Prepare to Buy a House in One Year

59% of Americans consider home ownership to be part of the American dream. You don't just want to purchase a property eventually, though. If you are interested in buying a house in one year, read on for the tools to make that dream a reality.  Here's how to save...