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Hometap

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About company

Hometap is a company that offers homeowners a way to tap into the equity of their homes without taking on additional debt. Founded in 2017 and based in Boston, Massachusetts, Hometap provides homeowners with cash in exchange for a percentage of their home's value. The company offers a unique alternative to traditional home equity loans, which often require homeowners to take on additional debt and make monthly payments.

With Hometap, homeowners receive a lump sum payment in exchange for a percentage of their home's value. This payment can be used for a variety of purposes, such as home renovations, debt consolidation, or to fund a child's education. Homeowners are not required to make any monthly payments to Hometap, and the company's investment is paid back when the home is sold or the term of the investment is up.

Hometap offers a simple and straightforward application process, with approvals typically made within a matter of days. The company works with homeowners in a variety of states across the United States, with plans to expand its reach in the future.

Pros and Cons

    Hometap is a company that allows homeowners to access home equity without taking on additional debt. Here are some potential pros and cons of using Hometap:

    Pros

    1. No additional debt. One of the biggest benefits of using Hometap is that you don't have to take on additional debt in the form of a loan or line of credit. Instead, you receive a cash payment in exchange for an equity stake in your home.

    2. Flexibility. Hometap funds can be used for a wide range of purposes, such as paying for home repairs, starting a business, or paying for education.

    3. No monthly payments. Unlike a loan or line of credit, Hometap does not require monthly payments. Instead, you pay back the investment when you sell your home, refinance, or when the term of the investment ends.

    4. No interest rate. Hometap investments are not loans, so there is no interest rate associated with them.

    Cons

    1. Equity stake in your home. When you use Hometap, you are giving up a portion of your home equity in exchange for cash. This means that if your home value increases, you will owe Hometap a larger share of the equity.

    2. Potential profit loss. If you sell your home for less than its value when you took out the Hometap investment, you may end up owing more money than the sale price. This could lead to a loss of profit or even negative equity.

    3. Eligibility requirements. Not all homeowners will be eligible for a Hometap investment. You need to have a certain level of equity in your home, good credit, and a steady income.

    4. Limited availability. Hometap is not available in all states, and the company has specific requirements for the types of homes and homeowners it will work with.

    5. Additional fees. Hometap charges a fee when you take out the investment, which is deducted from the amount you receive.

    Terms and conditions

    Hometap makes home equity investments. It earns money if your home’s value goes up. You don’t need to pay any fees or contribute monthly payments to the company. You only share your home’s equity. 

    The investment amount can go up to 30% of your home’s value or $600,000.

    The investment term Hometap suggests the best is 10 years. During the effective period, you can buy out the investment, take a home equity loan, or sell the home. 

    Funding a Loan

    Hometap offers an alternative to traditional home equity loans by providing homeowners with a way to access a portion of their home's equity without taking out a loan. The process of obtaining funding from Hometap involves several steps:

    1. Prequalification. Homeowners can complete a prequalification form on Hometap's website to see if they meet the initial eligibility criteria. This includes having a minimum of 25% equity in their home and living in one of the states where Hometap operates.

    2. Application. If prequalified, the homeowner can submit an application that includes additional financial and property information. Hometap will review the application and notify the homeowner of their eligibility.

    3. Home appraisal. If the homeowner is eligible, Hometap will conduct an appraisal of the home to determine its current value.

    4. Investment offer. Based on the home appraisal, Hometap will make an investment offer to the homeowner, which will include a percentage of the home's equity in exchange for an ownership stake in the property.

    5. Funding. If the homeowner accepts the investment offer, Hometap will provide funding in the form of a lump sum payment. The homeowner can use this money for any purpose, including home renovations, debt consolidation, or other expenses.

    6. Repayment. Hometap's investment is repaid when the homeowner sells the property, refinances their mortgage, or at the end of the investment term, which is typically 10 years. At that time, Hometap will receive a percentage of the home's appraised value or the sale price, depending on the agreement. If the value of the home has gone down, Hometap may receive less than their original investment. If the value of the home has gone up, Hometap will receive a larger share of the appreciated value.

    Overall, Hometap's funding process offers homeowners a way to access the equity in their home without taking out a loan, and provides a flexible alternative to traditional home equity loans.

    Hometap

    FAQ

    What is Hometap?

    Hometap Investment is a home equity sharing company allowing you to receive cash in exchange for your home’s value share.

    How does Hometap make money?

    Hometap earns money when your home’s value rises. If it falls down, the company takes the risk.

    What is the difference between Hometap and the loans?

    Hometap doesn’t issue loans. It’s not a lender. It shares your home’s value, so you don’t need to make Hometap payments or pay fees.

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    We're on a mission to make homeownership less stressful and more accessible.

    © Hometap Equity Partners, LLC
    Financial products
    Hometap
    Home Equity Investment
    Rating by Finanso®
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    The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

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