Point Review

Where is the Point product available?

Point Digital Finance, Inc is a financial services company based in Palo Alto, CA. It was founded in 2014 and offers shared equity appreciation contracts to qualified applicants in 12 states (and Washington, DC).

How does the Point product work?

A shared equity agreement (also called a shared appreciation agreement or shared equity contract) is essentially a way to sell a small fraction of the equity in your home to an investment company. The two primary use cases are to help finance a mortgage down payment and secondly, as a way to extract equity/cash out of your home.

The Point product supports home purchase down payments. Point Digital Finance, Inc aims to help more people afford to buy a home. Rather than giving you a loan, they invest alongside you in your home by matching a percentage of your down payment. Through the Point product, Point Digital Finance, Inc helps to finance your mortgage down payment in exchange for a share of the home’s future appreciation.

As a home equity loan alternative, the Point product allows you to tap into the equity in your home without the monthly payments that come from a traditional home equity loan or line of credit. This product primarily targets the home-equity-rich who are in need of cash for reasons such as a home improvement project or to eliminate debt.

The transaction is secured like a loan but you won't be paying Point Digital Finance, Inc a monthly loan payment with interest. Instead, if your home goes up in value, Point Digital Finance, Inc share in the gain; if it goes down, they share in the loss.

How much will Point invest into a shared equity agreement?

The Point program offers equity investments that range from 5% up to 10% of a property's market value. As you might expect, Point Digital Finance, Inc has a cap on the amount of funding they will invest in a single home. For the Point program, the most Point Digital Finance, Inc can invest in a single home is $250,000.

What are the costs associated with Point?

Unlike loans, the costs associated with shared equity investments are not based on an interest rate. There are no monthly payments or accrued interest. Instead, Point Digital Finance, Inc shares in the change in value of your property. If your property value goes up, Point Digital Finance, Inc gets a share. If the value drops, Point Digital Finance, Inc shares in the losses. They only get their money back when you sell your home – and they typically only make a profit if you also make a profit.

Under the Point program, at the time your home is sold Point Digital Finance, Inc will recieve an amount equal to 20% of any appreciation or depreciation in the home’s price.

The Point program includes an origination fee that ranges from 3%, up to 5% of their investment.

What are the terms for a shared equity investment via Point?

You can use the funds provided by Point for up to 10 years. After 10 years, you will need to either sell your home or buy them out.

To buy Point Digital Finance, Inc out, you would need to pay back their original investment plus or minus their share of your home’s change in value.

How long does it take to close a deal with Point?

Point will typically fund a deal within 12 days of approval.

What types of property does Point consider?

Shared equity investors often have restrictions on the type of properties they will invest in. Point will consider shared equity agreements secured by the following property types:

• Primary home
• Secondary homes and vacation properties