About lender
Point Digital Finance is a fintech niche and a consumer finance lender specializing in home equity contracts. It offers homeowners and homebuyers money for a share of their home's equity. With Point, one will be able to dispose of debt, pay for a large expense or fund a dream.
Point excellent reviews on Trustpilot, A+ rating from the Better Business Bureau, and it was recognized with 2017 Fin lab award, was featured in Forbes, the Atlantic. The company nowadays operates in downtown Palo Alto, California.
One of the secrets of Point's unprecedented success and a great advantage compared to other products is no regular monthly payments.
Pros and cons
Pros
Charges no monthly payment and no prepayment penalty for up to 30 years;
If the clientele's home depreciates, the buyback cost will be smaller;
A 5% down payment;
Ability to the low mortgage amount;
The option to avoid private mortgage insurance (PMI);
Secure and reliable warranty protection.
Cons
A Deed of Trust is being put on clienteles' property, so they do not independently own this property;
There may be strict restrictions on home renovation, refinancing, or renting a property in your house;
Because of documentation inaccuracy, you can't know how much money you have to come up with to get out of the arrangement with Point;
Clientele don’t know the actual terms of a deal until they sprung for a costly appraisal;
Point does not list legal documents upfront for people to review.
Terms and conditions
All loans provided via Point require you to be a credit union member. The company offers the Annual Percentage Rate (APR) as low as 4.75% for the most qualified and competent applicants and, depending on a credit profile, may be higher for other applicants.
For instance, a mortgage borrower with a CLTV of 50% and a credit score of 800 would commonly have an APR of 4.75%.
The rate is variable and is indexed to the Prime Rate and a margin determined by credit history, loan amount, property usage, and CLTV ratio. The floor rate is 3.25%, and the maximum APR is 18%. The variable rate will not rise more than 2% annually.
Point provides three types of services for homebuyers and homeowners. While HEI and HELOC programs are intended for homeowners, SEED is developed for homebuyers.
HEI (Home equity investment)
It is a service for homeowners which assumes that Point will invest in a share of their home equity by paying cash. You can get from $25,000 to $500,000, depending on your home's value and the amount of equity you own. This program has such tangible benefits for clientele as no income requirements, monthly payments within 30 years, and no need for having impeccable credit. Besides, you can use unlocked equity for various purposes, such as paying down debt, expenses, or repairing a house. One significant point of this service is that after exiting the contract, money is reimbursed back in proportion to clienteles' wealth. The cost of the service will comprise the amount of money initially received and a share of one's home appreciation. Consider that if your home has been valued past a certain verge, the cost will be capped, and if it has depreciated, the buyback cost will be less.
HELOC (Home equity line of credit)
It represents a line of credit that provides clientele with an opportunity to get money from their home equity. The principle of the work resembles a credit card as clientele are able to withdraw money up to their maximum limit and, when paying down a balance, can take out funds again. The amount of money you will be able to get directly depends on how much equity you possess at home.
Program conditions are straightforward as clientele will need to retain 20% of their home equity after getting HELOC services. There can also be additional limitations based on a person's DTI. Homeowners can get up to $500,000 with a Point HELOC. Compared with a personal loan and a credit card, Point's HELOC has some substantial perks as lower rates and a significantly upper bound. In addition, while credit cards and personal loans are unsecured, a HELOC is secured by your home and leverages.
SEED Investment
SEED Investment may be relevant for those who are first-time buyers or looking for a second home. This program offers a 20% down payment and gets up to 15% towards one's home down payment, enabling clientele to reduce monthly mortgage payments. With this program, you may avoid PMI by meeting or exceeding a 20% down payment with a SEED investment.
