Have an immediate problem with our situation. Retired, expecting to stay in our home which will be placed in trust for our children who do not expect to inherit anything - their take is do what yu want to make things better. House will need upgrades and expenses anyway, besides taxes and insurance. We would expect about 10 years decent health. We have an annuity giving about 10k a year, and about 35k in securities and 70k in IRA securities. 125k borrowed would take care of problems/make house more enjoyable. Based on this, would this be a good or poor investment? I am estimating an HE loan would be about $350 a month - this is still doable in lieu of a 2nd car loan - we could get by. What might be best solution ?
The question is, what is a better way, or I would ask, what is the best way to get money now out of your homes equity, if you do not have a qualifying level of income for a HELOC?
Some of us are seeing this as money on the table, that we need Now. Yes, we will pay it off in the future, so it's like a credit card. But we could use the money now to get us on a better situation Today.
A car loan will cost you double to quadruple the amount you borrow by the time you pay it off. A home loan will cost you double to quadruple the amount you borrow by the time you pay it off. A home equity agreement will cost you less than double the amount you sell.
Thanks for the video. I was actually looking into one of these and I knew there had to be more than just the pretty print. I was always told what the bold print giveth the small print taketh away. I understand that some people are having bad times and this does sound appealing because there are no payments. I make no judgments on anyone who has to make this decision because everyone has to make their own decisions and what they do with their homes and their home equity. I just encourage people to really do their homework before they do one of these like I am. Thank you so much Kevin for making this video and educating me on this. This really opened my eyes and deterred me from wanting to do it. The only way I would do this is if my back is against the wall and I have no other options.
I bought my home in 2010 for $130,000, now it's worth $550,000, so if I sell a 25% stake I get $130,000, so it seems like a really great deal to me. I'm 53 so after 30 years I'll be 83, or dead and I've gotten to use the money and I don't have to deal with the fall out, and with no kids.... Also my home is worth now the same that it was in 2008 right before the crash, so why does anyone think that prices can stay high where so few can afford them? I cash out what I paid in, I just can't see prices going continuously and if the economy tanks like 15 years ago (which is a common business cycle) I have someone else share the loss. Also lets say we do have another crisis and home prices around the country drop by 66%, will they even still be in business in 20 years? No product is right for everyone, but some a great for a few people.
Not to mention in order to get a heloc or cash out refi you need to have damn near perfect credit to qualify and alot of people don't have that mostly likely because they have been using their credit cards to pay bills which brings their score down so Kevin...what would you suggest a homeowner that needs cash but can't qualify for your traditional loan options do?
Take that 40% as a flat sum. Divide it over the 30 years you had the mortgage and subtract inflation. From there, decide if it's worth it or not to you. I'd say 99% of people would say it's in your favor
@maxrubin9540 yes it is, because you don't pay rent in a lump sum. If you want to compare apples to apples, you have to look at it per lease period (1 year, 1 month, etc)
With interest rates being thru the roof these days i was able to get this share agreement on a property i owned outright , not only was i able to invrease the monthly rents by doing some renovations , i was also able to buy a duplex cash in Oklahoma which i deeded to my trust that also cashflow wonderfully per month. The property i got this agreement on is in Phoenix AZ and i plan to either refinance it in 10 years and oay this off or sell it to lay it off, either way i have the increased appreciation on my duplex on oklahoma as well as positive vashflow on all these properties for the next 10 years, also the duplex can never be touched due to title in trust. This is a win win for me! Also when interest rates go down i can refi the duplex and use that money to purchase more multifamily properties
Thank you. I read over some of these equity sharing contracts, and it was INSANE. You’re often selling ROFR and POA control over your property. Also, in the event of your death, you’d better have your estate SOLID, because these agreements are super aggressive, putting your legacy at risk! Signing a deal like this is like becoming a tenant in your own residence!
This helped us so much. After watching your video, my husband thought to look at the terms of agreement and noticed the following for a company we were considering called Unlock, and as you can see, you will be in debt and/or litigation forever. There was way more to the terms, but you get the point. 1.3 Amendment of Terms Unlock reserves the right, in its sole discretion, to amend the Terms, at any time and without prior notice, including to change, modify, add to, update or remove terms and conditions (collectively “amend” or “update”). If we choose to amend the Terms, we will update the Effective Date at the top of the Terms and post the updated version. We may also, at our option, choose to notify you by e-mail or another means. By continuing to use the Website after we have posted an updated version of the Terms or otherwise notified you of an update, you are affirming that you agree to be bound by the amended Terms. This provision is subject to a few limitations in the “Dispute Resolution” section below. If the amended Terms are not acceptable to you, your only recourse is to stop using the Website. No other modification, amendment, supplement of or to the Terms will be binding on Unlock unless it is in writing and signed by an authorized representative of Unlock. 1.4 Consequences of Non-Compliance Your failure to comply with the Terms may result in the suspension or termination of your account and/or access to the Website, and may subject you to civil and criminal penalties.
It really depends on your individual needs and timeline. Its a good loan because it doesn’t affect your personal credit and if you time it well, you can pay off the loan during a down market, instead of an up market.
It is good for me because I don't intend to pay any money back (Im broke) and and Im not going to sell my place or leave it to anyone. They can have it for giving me money and now I can stay in my place the rest of my life (I am old) no mortgage payments and I have no one to leave my place to. They can have it.
@@jamesmc1016 what you are doing is very similar to what my dad did , my mom passed away , he had a gambling issue his whole life always took home equity loans and maxed out cards when he was told you can not have another HELC, too much DTI. He used this and. Took the maximum when he was 80 , he moved two more years , never paid a penny back as he maxed out equity and left his kids nothing . So he got to live his last few years without worrying about money he spent his mad I’m glad he did
Will they issue this if there is no equity? If you’re 97.5% LTV then get cashed out by this company, it would work out if you held the property forever and used their money for down payments on another property
Do some PV analysis on a high cashflow home over 30 years. That's the only time it really makes sense to do this because of the time value of the cash, but the scenario has to be just right to beat out a traditional mortgage or HELOC. I super appreciate you putting this kind of content out and protecting your viewers. *BIG HUGS* You have my vote, fellow Californian!
They only deal with people with equity!!! The bottom portion of society doesn't own property, they're generally are renters!!! You guys buy into anything a person with money says!!! DUMB!!!
Thank you. This is all over social media so it's a great explanation and I really appreciate your help understanding this. After all, the company is not going to explain it in a way that shows how badly they will scam you.
I agree that +90% of the time this is a scam. However, every financial youtuber lately has been talking about the housing bubble and the housing crash. Say a person bought a house for $200,000, and now it appraises for $400,000. They only owe $100,000. Wouldn't it be a damn near probability that their home. Already will go back down during this upcoming housing bubble in the next 5 years? If that were the scenario, wouldn't this HEI be a pretty good deal, a negative interest rate loan essentially?
Thanks. I got a heloc at 12 percent. My friend was interested in a HEA. I told her they were predatory, and not a good idea! It forces the sale of your home in future, ready or not. And eats up the equity and you still have any mortgage due. So, now no house, no money and ?????
They undervalued my home in the beginning and have now over inflated my home by $400k. Can I report then to not pay them the total amount they say I own them?
I don't think its "scammy" at all. The truth is always somewhere down the middle. The terms are clearly outlined on the website. You just have to read and do your due diligence. It may not be for everyone but leveraging equity without monthly payments works for you if you're using that upfront money, to MAKE MONEY. The businessman or businesswoman sees everything as an opportunity. Would I trade future equity in my current property for the opportunity to acquire one, two possibly three properties now? The answer is yes. Are there other ways to do that? Yes. So, at the end of the day, its just another money option. I wouldn't be too far one way or the other about using it. Just do what's right for you and know what the terms are. Appreciate the breakdown. That's why I follow. Thanks!
But it’s not really a scam cause isn’t that still what the banks are getting on HELOC AND HELoans but just upfront. The interest rate tied to the HELOC and payment overtime is pretty much the same thing. But what you get with this is no payments at all until you at least sell.
10% of the value may be equal to 30% or more of the actual equity position, and no payments, they are taking care of the debt, therefore higher equity position would be justified.
I agree, these loans aren't for average homeowners. They're more for investors. It's like hard money and private money lenders aren't for the average homeowner. Investors pay 9% 15% or even more for hard or private money when traditional financing is around 5.5% at this time. I personally know an investor that used this company and with the proceeds he got, he bought 3 other properties, one in which he rehabbed and made close to 75k in profits and the other 2 properties are rentals. With the profits he made from the 75k flip, he bought 2 other properties. Financed of course. The point is, because of point he has accumulated 5 properties. It's expensive, yes but more for investors.
What if your house appraises well, and you can get an extra large amount for extended time, say 20-30 years. You know no one will want your house and your family doesn’t want it. I would take the cash and leave the property to point. It will be their problem.
Given this scenario its a good call if you use this cash out to build some generational wealth for yourself and if you have nothing to leave behind to anyone so be it. I wouldn't do it if the equity is not double your initial home value however
I wish I had seen your video a couple years ago when I got this loan from Point. I so wouldn't even deal with them then. I did do the research. I looked at it and at that time it looked good. I did 100,000 at the most. I thought I was on pain. Were from 30 to 50 back no. I now trying to pay back and they want over 180,000 and for people who have not good credit and are unable to get the home equity lines of credit or home equity loans or second mortgage, is it or anything like that? Sometimes this is the only way they're able to do it. I tell everyone out there. If you're thinking about it, don't do it. It's not worth it. At the end when the mortgage comes due you're going to be basically giving your house to them for nothing. And you're still going to owe the money. The other types of loans you can take you can make monthly payments. This one they want a lump sum at the end. No monthly payments. Again, don't use point. You'll end up giving your house to them at the end and still owing the money
This is a reason why we need a person like you to lead California. Thank you for this thorough explanation, revealing these type of pot holes that target the less fortunate.
Hello ,I own my home.I paid it off 5 years ago. It’s valued at $291000. I have a lot of other debts. I was wondering is there a way to get money out of my home? I was thinking of refinancing. What do you suggest?
Great explanation! I recently came accross these types of loans and was curious about them. My gut feeling was it seemed bad but I had not really analyzed these loans. Now I know they are a serious rip-off!
This is an option for homeowners that do not have the ability to take on a hundreds of dollars per month loan payment and can benefit greatly from a large sum of cash. My wife and I plan on taking one of these loans out to remodel our home. We also don’t plan on selling for at least 10-15 years. I already have 100% equity in my home from our initial investment. I’m fine with losing 30% on the back end for money I have no other way of getting now.
It works for who it works for,I hope my app with point goes through because I’m almost drowning and I live in a town home fully paid off through death insurance from my mom who suggested I sell it any way if I wanted to, but I stayed and even if I sell my house even with all their fees I can still walk away with over 100k after selling either way the market goes. Could be a win for both parties. I have a 4 yo daughter in pre k and no car at the moment but I’m 35 and working and earning more than ever so this could save our lives!!!!!
Thank you for the info. I literally just received a mailer for this type of program. Sounded good so I checked out the first video that came up. ...yours.... definitely not doing it. Thanks for the save.
You also must pay fees - appraisal - and taxes So you will get less than what is asked I just went thru a consultation with a seller I asked for $20k - but am expected to pay back - $29k if paid in 2yrs - $49k if paid in 10yrs
iT SOUNDS GOOD TO ME. I' was offered a HEI and I am old and i don't own my home now, the bank does. I can't pay my mortgage now which increases every single year (I live in Florida and insurance is through the roof). I can never pay off my home now unless I win the Lotto. If Point gives me money to pay off my mortgage, then I can live in my place the remainder of my life and I won't have any more mortgage payments. Nobody else has offered me that. I won't live long enough to pay them back nor do I intend to pay them or care what chunk they will own after I am gone. I am not leaving my place to anyone so they can have it all for letting me live out my remaining years with no payments.
It's not a scam if people know beforehand that they are paying credit card fee-like costs. There are a number of property owners that would find those kinds of fees worth the high interest. This talks to the one blind spot you have which is you don't know the cost penalty of being blocked from capital-on-demand. In my case, $40k would allow us to renovate our home into a B&B and take us from $2,200 a month long-term rental income over to a $9,000 a month vacation rental income here in Hawaii. I would pay a 20% APR for that as would other owners faced with these kinds of opportunities against all the constraints upon our credit and capital access. But thank you for this great insight and new resource venue. Raghu G
Thank you, I'm in a similar situation. If you can't have access to other loans, and you have a plan of investment that would allow you to make much more money, it's better than losing that financial opportunity. And in my case, could lose far more money if I cannot pay off a hard lender loan on my cabin which is worth far more than what I would pay for this loan. The cabin is a airbnb. Considering all the math is important, not just narrow specifics. Thanks, your reply is helpful as support in different scenarios this could work for.
I honestly dont think this is that bad provided you understand the terms. If you were in a position where you needed a large sum of money asap, but were unable or unwilling to take on debt, this could be a means of getting that money without having to worry about an additional payment you could not afford. Under very specific circumstances this might actually be one of the better options for some people.
I was on their site a few months ago. I was like this doesn't seem right. I'll pass! Great video Kevin. I voted for you as well. Stockton CA for kevin Paffrath
Why does their equivalent APR differ from your calculations? Also, keep in mind that the demographics mostly using this service would be individuals of which a HELOC or less expensive product is unattainable for them. You need to put more context and use cases in your message because not everyone has access to low cost capital.
Which example? Remember to consider the fees they're charging. And sure, if it's going to be targeted at low-income individuals, then disclosures should be even more obvious than they are. It should be a crime to say "no payments" when obviously you're paying.
@@MeetKevin when you look at the screen when you were tabulating the costs and dividing by 50k. There is “equivalent APR” under each scenario. It’s off by about 7% in some cases. I see you are calculating correctly but not sure why their rate is lower. Yeah I mean no monthly payments isn’t going to be cheap and that could be extremely valuable to folks ina rough spot who have experienced a good rise in home equity. I don’t really see an alternative in the market that allows that flexibility on the qualification front and payment front simultaneously .
@@mymoodtoday1 becuase their apr doesn't include the upfront fees you pay at closing to secure the loan appraisal fees etc their apr isn't correct and meant to trick you. same thing paypal and other companies do when you pay the fees upfront for a loan its called a capital advance fee and isn't classified as an interest payment its basically a finance trick
@@davidportnoy no I did the math and the fees don’t close the gap that I am referring to. Kevin calculated 19% and the screen was saying 12%. Something is off ..
To fair looks like thyre pretty clear on numbers. Also you arent paying until sell date so i mean if never sell not really getting screwed. Unless actually view home as investment. And who says real estate always go up
I read they put a cap on it. You will pay it out in 10 years or else 30 years, basically causing you to sell your house in order to pay them off, and they will end up with most of the money.
I get it but being someone with a poor credit score, there may be no other options. It seems like you are too punished for making some poor decisions or having unfortunate circumstances. People with poor credit do not have the option of a HELOC or laon. A refinance is no better given how they slam you with poor credit with upfront points that are just lost. Being someone in a challenging financial situation, I wish more options were available to us.
Would you loan somebody money taking all the risk? They lower their wrist because they're loaning the money out. There's no insurance involved in this. They have to protect themselves. If you don't want to do it, then don't do it. What if you took that money and bought another house with it. Wouldn't the value of that other house go up. Yes it would be going up. You would have two houses working for you. You ever think about that.
been subscribed for 3 years, never had this video pushed to me. only saw it after looking up one of these services - thank you for letting me know before I did something stupid
This is great, I was looking into this, but keep asking for more info and numbers but never go them, just you won’t pay until 30 year.but thanks for the explanación with the numbers.
How much do you want to bet that company is going to send offers to entice the owners of the home at the address entered into the webpage from this video?
![American Airlines CRASHES into Blackhawk Helicopter in D.C. [MOMENTS AGO!] Flight 5342](http://i.ytimg.com/vi/p2BaE5Uj8kE/mqdefault.jpg)
Have an immediate problem with our situation. Retired, expecting to stay in our home which will be placed in trust for our children who do not expect to inherit anything - their take is do what yu want to make things better. House will need upgrades and expenses anyway, besides taxes and insurance. We would expect about 10 years decent health. We have an annuity giving about 10k a year, and about 35k in securities and 70k in IRA securities. 125k borrowed would take care of problems/make house more enjoyable. Based on this, would this be a good or poor investment? I am estimating an HE loan would be about $350 a month - this is still doable in lieu of a 2nd car loan - we could get by. What might be best solution ?
May I ask which investments are good? I've been looking at a few different ones but want others' opinions as well
They will not give you a loan if your home is in a trust or in an LLC.
The question is, what is a better way, or I would ask, what is the best way to get money now out of your homes equity, if you do not have a qualifying level of income for a HELOC?
Thank You. I was contemplating this loan ? And you saved me from going down this road.
Some of us are seeing this as money on the table, that we need Now. Yes, we will pay it off in the future, so it's like a credit card. But we could use the money now to get us on a better situation Today.
A car loan will cost you double to quadruple the amount you borrow by the time you pay it off.
A home loan will cost you double to quadruple the amount you borrow by the time you pay it off.
A home equity agreement will cost you less than double the amount you sell.
Very true.
Thank you Kevin for educating us on this very dangerous investment vehicle. Truly a public service
I’m sooo glad you did a video on this, I was thinking of doing this
Thanks for the video. I was actually looking into one of these and I knew there had to be more than just the pretty print. I was always told what the bold print giveth the small print taketh away. I understand that some people are having bad times and this does sound appealing because there are no payments. I make no judgments on anyone who has to make this decision because everyone has to make their own decisions and what they do with their homes and their home equity. I just encourage people to really do their homework before they do one of these like I am. Thank you so much Kevin for making this video and educating me on this. This really opened my eyes and deterred me from wanting to do it. The only way I would do this is if my back is against the wall and I have no other options.
I bought my home in 2010 for $130,000, now it's worth $550,000, so if I sell a 25% stake I get $130,000, so it seems like a really great deal to me. I'm 53 so after 30 years I'll be 83, or dead and I've gotten to use the money and I don't have to deal with the fall out, and with no kids.... Also my home is worth now the same that it was in 2008 right before the crash, so why does anyone think that prices can stay high where so few can afford them? I cash out what I paid in, I just can't see prices going continuously and if the economy tanks like 15 years ago (which is a common business cycle) I have someone else share the loss. Also lets say we do have another crisis and home prices around the country drop by 66%, will they even still be in business in 20 years? No product is right for everyone, but some a great for a few people.
Not to mention in order to get a heloc or cash out refi you need to have damn near perfect credit to qualify and alot of people don't have that mostly likely because they have been using their credit cards to pay bills which brings their score down so Kevin...what would you suggest a homeowner that needs cash but can't qualify for your traditional loan options do?
Good questions this is exactly my situation
He is just a nay sayer. He brings no value to the table
You should compare it to mortgage. Throughout out the mortgage loan your true interest is 30 to 40 %, so call mortgage a scam also.
Take that 40% as a flat sum. Divide it over the 30 years you had the mortgage and subtract inflation. From there, decide if it's worth it or not to you. I'd say 99% of people would say it's in your favor
Absolutely right
@@b.sharp.you would need to discount the amount back to the present. Dividing the lump sum is not an accurate picture
@maxrubin9540 yes it is, because you don't pay rent in a lump sum. If you want to compare apples to apples, you have to look at it per lease period (1 year, 1 month, etc)
With interest rates being thru the roof these days i was able to get this share agreement on a property i owned outright , not only was i able to invrease the monthly rents by doing some renovations , i was also able to buy a duplex cash in Oklahoma which i deeded to my trust that also cashflow wonderfully per month. The property i got this agreement on is in Phoenix AZ and i plan to either refinance it in 10 years and oay this off or sell it to lay it off, either way i have the increased appreciation on my duplex on oklahoma as well as positive vashflow on all these properties for the next 10 years, also the duplex can never be touched due to title in trust. This is a win win for me! Also when interest rates go down i can refi the duplex and use that money to purchase more multifamily properties
Thank you. I read over some of these equity sharing contracts, and it was INSANE. You’re often selling ROFR and POA control over your property. Also, in the event of your death, you’d better have your estate SOLID, because these agreements are super aggressive, putting your legacy at risk! Signing a deal like this is like becoming a tenant in your own residence!
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Thanks so much for this video! It's an important PSA for sure!
This helped us so much. After watching your video, my husband thought to look at the terms of agreement and noticed the following for a company we were considering called Unlock, and as you can see, you will be in debt and/or litigation forever. There was way more to the terms, but you get the point.
1.3 Amendment of Terms
Unlock reserves the right, in its sole discretion, to amend the Terms, at any time and without prior notice, including to change, modify, add to, update or remove terms and conditions (collectively “amend” or “update”). If we choose to amend the Terms, we will update the Effective Date at the top of the Terms and post the updated version. We may also, at our option, choose to notify you by e-mail or another means. By continuing to use the Website after we have posted an updated version of the Terms or otherwise notified you of an update, you are affirming that you agree to be bound by the amended Terms. This provision is subject to a few limitations in the “Dispute Resolution” section below. If the amended Terms are not acceptable to you, your only recourse is to stop using the Website.
No other modification, amendment, supplement of or to the Terms will be binding on Unlock unless it is in writing and signed by an authorized representative of Unlock.
1.4 Consequences of Non-Compliance
Your failure to comply with the Terms may result in the suspension or termination of your account and/or access to the Website, and may subject you to civil and criminal penalties.
If they change it in their favor then you have a right to walk away.
It really depends on your individual needs and timeline. Its a good loan because it doesn’t affect your personal credit and if you time it well, you can pay off the loan during a down market, instead of an up market.
It is good for me because I don't intend to pay any money back (Im broke) and and Im not going to sell my place or leave it to anyone. They can have it for giving me money and now I can stay in my place the rest of my life (I am old) no mortgage payments and I have no one to leave my place to. They can have it.
@@jamesmc1016 what you are doing is very similar to what my dad did , my mom passed away , he had a gambling issue his whole life always took home equity loans and maxed out cards when he was told you can not have another HELC, too much DTI. He used this and. Took the maximum when he was 80 , he moved two more years , never paid a penny back as he maxed out equity and left his kids nothing . So he got to live his last few years without worrying about money he spent his mad I’m glad he did
And where did you pull that interest rate for a home equity loan? those rates are much higher than your 4%.
Hey Kevin, it would be great if you compared Unison in the mix.
I'm about to sign contract soon. This is only option I have just to do home improvement. I don't have any other options.
kinda in the same boat as you, self employed, credit tanked a bit, how did you make out? Did you even go through with it?
I’m about to do the same
Yeah I see no other option myself kind of stuck between a rock and a hard spot may have to do it
@@onlinext you went Thur with point ?
You don’t have a pace program like Ygrene in your state?
Wow...thank you for sharing this knowledge really appreciated....
So what’s the option for those of us who can’t qualify for heloc or cash out refi because of DTI?
Exactly
Go ask Congress for a bailout. That's what bankers and corporations have always done.
@@jpnewman1688 exactly lol
I would like a video that compares this to a reverse mortgage. For retired people who still have a mortgage and debt is one better than the other?
Hello! How about if you make payments every month
Will they issue this if there is no equity? If you’re 97.5% LTV then get cashed out by this company, it would work out if you held the property forever and used their money for down payments on another property
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Do some PV analysis on a high cashflow home over 30 years. That's the only time it really makes sense to do this because of the time value of the cash, but the scenario has to be just right to beat out a traditional mortgage or HELOC. I super appreciate you putting this kind of content out and protecting your viewers. *BIG HUGS* You have my vote, fellow Californian!
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This company feeds on the bottom portion of society that is already getting screwed by the rapid rate of innovation in our world
They only deal with people with equity!!! The bottom portion of society doesn't own property, they're generally are renters!!! You guys buy into anything a person with money says!!! DUMB!!!
Bottom portion? Lol
Nobody in the bottom "owns" any assets or has "equity" in anything
Thank you. This is all over social media so it's a great explanation and I really appreciate your help understanding this. After all, the company is not going to explain it in a way that shows how badly they will scam you.
Great video. I’ve seen things like these before and never really looked too deep into them. Glad you did the research for me. Very informative!
Thank you for exposing these scams. Scammers prey on those who are desperate.
Hey Kevin, what about “HOMETAP”? what can you say about them?
I agree that +90% of the time this is a scam. However, every financial youtuber lately has been talking about the housing bubble and the housing crash. Say a person bought a house for $200,000, and now it appraises for $400,000. They only owe $100,000. Wouldn't it be a damn near probability that their home. Already will go back down during this upcoming housing bubble in the next 5 years? If that were the scenario, wouldn't this HEI be a pretty good deal, a negative interest rate loan essentially?
@Brian Henningsen They're betting on the long term gain.
Thanks. I got a heloc at 12 percent. My friend was interested in a HEA. I told her they were predatory, and not a good idea! It forces the sale of your home in future, ready or not. And eats up the equity and you still have any mortgage due. So, now no house, no money and ?????
They undervalued my home in the beginning and have now over inflated my home by $400k. Can I report then to not pay them the total amount they say I own them?
Thank you for sharing this information. It was very informative and helpful! God bless you!
Kevin, how true are Zillow Zestimate s to real property values ? Are they close right on or tooo off ? Thank you
way off
@@justinnykampon the low side or upside
And it forces the sale of the home at some point if you can’t pay it back in the 10 or so years???
I don't think its "scammy" at all. The truth is always somewhere down the middle. The terms are clearly outlined on the website. You just have to read and do your due diligence. It may not be for everyone but leveraging equity without monthly payments works for you if you're using that upfront money, to MAKE MONEY. The businessman or businesswoman sees everything as an opportunity. Would I trade future equity in my current property for the opportunity to acquire one, two possibly three properties now? The answer is yes. Are there other ways to do that? Yes. So, at the end of the day, its just another money option. I wouldn't be too far one way or the other about using it. Just do what's right for you and know what the terms are. Appreciate the breakdown. That's why I follow. Thanks!
Best comment on here. Would only consider using this for a business opportunity not splurge on vacations etc.
Thank you for the breakdown.. There is always a catch but having you explain it while putting numbers to it, speaks volumes..
What do you suggest a person with bad credit sgould do????
But it’s not really a scam cause isn’t that still what the banks are getting on HELOC AND HELoans but just upfront. The interest rate tied to the HELOC and payment overtime is pretty much the same thing. But what you get with this is no payments at all until you at least sell.
Don’t they have a cap?
10% of the value may be equal to 30% or more of the actual equity position, and no payments, they are taking care of the debt, therefore higher equity position would be justified.
Basically deferred interest? Similar to option arms back in the day?
Are you suggesting Zillow is not good to use since such loans appears on the apps?
I agree, these loans aren't for average homeowners. They're more for investors. It's like hard money and private money lenders aren't for the average homeowner. Investors pay 9% 15% or even more for hard or private money when traditional financing is around 5.5% at this time. I personally know an investor that used this company and with the proceeds he got, he bought 3 other properties, one in which he rehabbed and made close to 75k in profits and the other 2 properties are rentals. With the profits he made from the 75k flip, he bought 2 other properties. Financed of course. The point is, because of point he has accumulated 5 properties. It's expensive, yes but more for investors.
What if your house appraises well, and you can get an extra large amount for extended time, say 20-30 years. You know no one will want your house and your family doesn’t want it. I would take the cash and leave the property to point. It will be their problem.
Given this scenario its a good call if you use this cash out to build some generational wealth for yourself and if you have nothing to leave behind to anyone so be it. I wouldn't do it if the equity is not double your initial home value however
I wish I had seen your video a couple years ago when I got this loan from Point. I so wouldn't even deal with them then. I did do the research. I looked at it and at that time it looked good. I did 100,000 at the most. I thought I was on pain. Were from 30 to 50 back no. I now trying to pay back and they want over 180,000 and for people who have not good credit and are unable to get the home equity lines of credit or home equity loans or second mortgage, is it or anything like that? Sometimes this is the only way they're able to do it. I tell everyone out there. If you're thinking about it, don't do it. It's not worth it. At the end when the mortgage comes due you're going to be basically giving your house to them for nothing. And you're still going to owe the money. The other types of loans you can take you can make monthly payments. This one they want a lump sum at the end. No monthly payments. Again, don't use point. You'll end up giving your house to them at the end and still owing the money
Please me and my dad just did this i 😭help! How do we get out pont??
This is a reason why we need a person like you to lead California. Thank you for this thorough explanation, revealing these type of pot holes that target the less fortunate.
Hello ,I own my home.I paid it off 5 years ago. It’s valued at $291000. I have a lot of other debts. I was wondering is there a way to get money out of my home? I was thinking of refinancing. What do you suggest?
Great explanation! I recently came accross these types of loans and was curious about them. My gut feeling was it seemed bad but I had not really analyzed these loans. Now I know they are a serious rip-off!
You Video Literally Saved our Lives!
Thank you for the information. Seems they are always shady. Liars and greed breeds disaster.
It's a payday loan on your home. Also if you don't pay them buy the time frame you agree you also are forced to sell your home.
30 years is a long time to pay back.
Does anyone do this but not outrageously counting on desperation?
Now that rates are 7% would this typ of investment make sense since helocs are close to 9%
This is an option for homeowners that do not have the ability to take on a hundreds of dollars per month loan payment and can benefit greatly from a large sum of cash. My wife and I plan on taking one of these loans out to remodel our home. We also don’t plan on selling for at least 10-15 years. I already have 100% equity in my home from our initial investment. I’m fine with losing 30% on the back end for money I have no other way of getting now.
It would work for you.
Don't they allow you to get 80 percent of your homes value of you own it out right?
It works for who it works for,I hope my app with point goes through because I’m almost drowning and I live in a town home fully paid off through death insurance from my mom who suggested I sell it any way if I wanted to, but I stayed and even if I sell my house even with all their fees I can still walk away with over 100k after selling either way the market goes. Could be a win for both parties. I have a 4 yo daughter in pre k and no car at the moment but I’m 35 and working and earning more than ever so this could save our lives!!!!!
Thank you for the info. I literally just received a mailer for this type of program. Sounded good so I checked out the first video that came up. ...yours.... definitely not doing it. Thanks for the save.
Gr8 Job. Thx a Ton for the Post.
You also must pay fees - appraisal - and taxes
So you will get less than what is asked
I just went thru a consultation with a seller
I asked for $20k - but am expected to pay back
- $29k if paid in 2yrs
- $49k if paid in 10yrs
is hometap any better
@@Timefades1 I’d like to know the same thing
@ all about the same
They also have first right of refusal. You cant sell the property to a family member for half acv
Great video, very informative. Thank you Kevin!!!🙏🏼🙏🏼🙏🏼
iT SOUNDS GOOD TO ME. I' was offered a HEI and I am old and i don't own my home now, the bank does. I can't pay my mortgage now which increases every single year (I live in Florida and insurance is through the roof). I can never pay off my home now unless I win the Lotto. If Point gives me money to pay off my mortgage, then I can live in my place the remainder of my life and I won't have any more mortgage payments. Nobody else has offered me that. I won't live long enough to pay them back nor do I intend to pay them or care what chunk they will own after I am gone. I am not leaving my place to anyone so they can have it all for letting me live out my remaining years with no payments.
Is it true if you own your home out right point will give you roughly 80 percent of the homes value in cash
Thanks this video save me from making a grave mistake
Thank you for this video. You should do a video on Unison as well! Cheers
What if you invest long term 20, 30 yes and home increases significantly in value? You didn't present that scenario
Wheres your campign.?
It's not a scam if people know beforehand that they are paying credit card fee-like costs. There are a number of property owners that would find those kinds of fees worth the high interest. This talks to the one blind spot you have which is you don't know the cost penalty of being blocked from capital-on-demand. In my case, $40k would allow us to renovate our home into a B&B and take us from $2,200 a month long-term rental income over to a $9,000 a month vacation rental income here in Hawaii. I would pay a 20% APR for that as would other owners faced with these kinds of opportunities against all the constraints upon our credit and capital access. But thank you for this great insight and new resource venue. Raghu G
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How about I take $150k what is the fee?
Thank you, I'm in a similar situation. If you can't have access to other loans, and you have a plan of investment that would allow you to make much more money, it's better than losing that financial opportunity. And in my case, could lose far more money if I cannot pay off a hard lender loan on my cabin which is worth far more than what I would pay for this loan. The cabin is a airbnb. Considering all the math is important, not just narrow specifics. Thanks, your reply is helpful as support in different scenarios this could work for.
Home pad charges 11% of the investment. We were thinking $35K to clean everything up at home. They want about 52K back in 10 years.
@@blaincarson8645 how did it work?
Thank you for the honest feedback i really learn alot from this Video!!
I honestly dont think this is that bad provided you understand the terms. If you were in a position where you needed a large sum of money asap, but were unable or unwilling to take on debt, this could be a means of getting that money without having to worry about an additional payment you could not afford. Under very specific circumstances this might actually be one of the better options for some people.
Nice rant. Appreciate your time
I was on their site a few months ago. I was like this doesn't seem right. I'll pass! Great video Kevin. I voted for you as well. Stockton CA for kevin Paffrath
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thank you !! great information
Why does their equivalent APR differ from your calculations? Also, keep in mind that the demographics mostly using this service would be individuals of which a HELOC or less expensive product is unattainable for them. You need to put more context and use cases in your message because not everyone has access to low cost capital.
Which example? Remember to consider the fees they're charging. And sure, if it's going to be targeted at low-income individuals, then disclosures should be even more obvious than they are. It should be a crime to say "no payments" when obviously you're paying.
@@MeetKevin when you look at the screen when you were tabulating the costs and dividing by 50k. There is “equivalent APR” under each scenario. It’s off by about 7% in some cases. I see you are calculating correctly but not sure why their rate is lower. Yeah I mean no monthly payments isn’t going to be cheap and that could be extremely valuable to folks ina rough spot who have experienced a good rise in home equity. I don’t really see an alternative in the market that allows that flexibility on the qualification front and payment front simultaneously .
@@mymoodtoday1 I’m going to call them directly and find out!
@@mymoodtoday1 becuase their apr doesn't include the upfront fees you pay at closing to secure the loan appraisal fees etc their apr isn't correct and meant to trick you. same thing paypal and other companies do when you pay the fees upfront for a loan its called a capital advance fee and isn't classified as an interest payment its basically a finance trick
@@davidportnoy no I did the math and the fees don’t close the gap that I am referring to. Kevin calculated 19% and the screen was saying 12%. Something is off ..
To fair looks like thyre pretty clear on numbers. Also you arent paying until sell date so i mean if never sell not really getting screwed. Unless actually view home as investment. And who says real estate always go up
I still don’t quite understand this. What share of appreciation they take is not obvious. And those fees are nuts.
Still fiighting for califirnia?
Whete are tje people that have or had or know if this van help?
Hey Kevin, what do you think about DSCR loans?
Great info. Thanks.
I penciled you,
in case of a recall .
Do they ever get compensated if you don’t ever sell your house then?
I read they put a cap on it. You will pay it out in 10 years or else 30 years, basically causing you to sell your house in order to pay them off, and they will end up with most of the money.
I get it but being someone with a poor credit score, there may be no other options. It seems like you are too punished for making some poor decisions or having unfortunate circumstances. People with poor credit do not have the option of a HELOC or laon. A refinance is no better given how they slam you with poor credit with upfront points that are just lost. Being someone in a challenging financial situation, I wish more options were available to us.
Would you loan somebody money taking all the risk? They lower their wrist because they're loaning the money out. There's no insurance involved in this. They have to protect themselves. If you don't want to do it, then don't do it. What if you took that money and bought another house with it. Wouldn't the value of that other house go up. Yes it would be going up. You would have two houses working for you. You ever think about that.
Are the other equity sharing companies just as bad?
Thank you, I learn so much from your channel.
EPIC public service!!!! Thank You 🙏🏻
been subscribed for 3 years, never had this video pushed to me. only saw it after looking up one of these services - thank you for letting me know before I did something stupid
Thank you for this. I almost made a huge mistake. I knew it seemed fishy.
Thank you sir, I was just about to signed
A fantastic PSA ... I neatly fell for this myself in a knee jerk, WOW, NO PAYMENTS ... Thank you 🏁
This is great, I was looking into this, but keep asking for more info and numbers but never go them, just you won’t pay until 30 year.but thanks for the explanación with the numbers.
How is that not usury?
How is this not considered predatory?
How much do you want to bet that company is going to send offers to entice the owners of the home at the address entered into the webpage from this video?
This is even LEGAL? (Sounds like payday loans/title loans)...
Great Video. They should be ashamed for stealing “legally” peoples money and screwing them over.
At least they can't create MONEY out NOTHING like BANKERS can, while you work, fight, kill and die for it.
How do we get out help!!
How they are doing? They're making sales of this
Thank you so much, because I keep getting these letters you saved me!!
Do the same analysis with the Reverse Mortgage proposition. It's a rip off also.