About lender
HomePace is an investment company established in 2020. It offers equity participation in real estate as an alternative to mortgage loans. This means that the homeowner receives money due to the fact that HomePace becomes a shareholder of his home equity. The investor company provides its customers with money upfront and receives share ownership. The homeowner can pay this money after the sale of the house.
HomePace is located in Park City, Utah. HomePace, Inc. has three founders: Joe Ciancioli, Jeboah Joerg, and Megan Graf. The company operates in six American states. These are Washington, Arizona, Utah, Colorado, North Carolina, and Tennessee.
Pros and cons
Often, for homeowners, such an alternative to conventional loans from HELOC can be much more profitable and attractive. However, you should still consider all aspects of the company's proposals.
Pros
You have no monthly or interest payments. Unlike loans, the conclusion of an equity agreement with HomePace does not require any monthly contributions. HomePace buys shares in your property and gets a share after its sale or after 15 years.
Even if your home loses value, your rights are protected. If the value of your home increases by the time it is sold, the company wins more money. And if the value of the house decreases, the company will suffer losses along with you.
You can get immediate cash for any needs: for repairing your home, paying off debt, unforeseen urgent situations, buying a second home, retirement, medical needs, making a down payment, and so on.
Flexibility. HomePace differs from its competitors in the flexibility of redemption. If possible, homeowners can buy out the investor during the term of the contract.
Cons
There is a time limit of 15 years. If you do not want to sell the house after this time, you will reach the end of your contract. You can buy out the contract.
If the price of the house has increased by the time of sale, HomePace will receive its part of the increased value since the company has its share in the value of the house.
Hidden commission of 3-4%. HomePace withholds the fee from the funds received at the conclusion of the investment contract, so homeowners do not feel this fee. However, with a co-investment of $250,000, the homeowner will receive $242,500. This is a commission of 3%.
Considering all the advantages and disadvantages of such joint capital participation, homeowners should be very careful before deciding. Despite the absence of monthly payments, you do not get this money for free. In the worst case, you may lose your only real estate.
Terms and conditions
The company charges a transaction fee of 3-4%. HomePace simply withholds the appropriate amount from the money it transfers to you. That is why the recipient does not feel the presence of these fees.
After signing the contract and receiving the money, the homeowner may not pay anything to their co-investor for 15 years. During this period, the customers have the right to pay HomePace the entire amount if there is any available money or to sell the house and pay the company's share. At the same time, it should be taken into account that the company can receive not only the amount paid at the conclusion of the contract but more if the price of the house has increased. If the cost of your home has decreased, HomePace will suffer losses along with you.
If you decide to opt for HomePace, make sure that your credit score is at least 630. In addition, for the conclusion of an equity participation agreement, the company will require an assessment of your real estate.
Funding an investment
Before receiving cash, you must complete the following steps:
Fill out an application on the company's website;
Pass a credit check, pass a house assessment;
Confirm your intention to a company representative who will contact you and sign an equity agreement.
After the contract is signed, you will receive your money in your bank account. It may be up to $250,000.
The company serves customers from Monday to Friday. You can contact a representative of the company from 8 am to 5.00 pm.
