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  Point

Point

in Shared Equity Agreements from Point Digital Finance, Inc

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Point

Unaffiliated

in Shared Equity Agreements from Point Digital Finance, Inc

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Highlights
Highlights
Investment Range % 5% - 10%
Investment Range $ Up to $250,000
Share of Home Appreciation 20%
Shared Equity Use Case
  • Equity Cash-Out
  • Mortgage Down Payment

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.

Point Terms & Requirements
Investment Term Amount
Equity Investment Range 5% - 10%
Maximum Equity Investment $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.

Point Costs
Fee Amount
Percentage Share of Home Appreciation 20%
Origination Fee 3% - 5%

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
Pros & Cons of Point
Pros Cons
  • Does not require monthly payments like a HELOC loan
  • Equity can be used to pay off high interest debt, while bringing down your debt to income ratio.
  • Does not show up on your credit report as debt.
  • Homeowners who don't qualify for HELOC loans are often approved by Point.
  • Upfront fee for home appraisal will cost between $500 - $1000. Plus an escrow fee of between $450 - $600.
  • Point records a Deed of Trust and Memorandum of Option on your property. If you default, Point could sell your property to recover its investment.
  • Point adjusts the appraisal of your home by shaving a percentage off the value. This may affect the amount that you owe Point later on.
  • There is a "penalty" imposed at the end of your term if you choose to rent the property (if it was not used as a rental at the beginning of the agreement) Point also implements limits on adding additional debt to the home to pay for any remodeling.
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    Contact

    • Headquarters
    •   522 Ramona St
      Palo Alto, CA 94301 USA
    •   Visit Site

    About Point

    Availability

    Alaska Alabama Arkansas Arizona California Colorado Connecticut Washington, D.C. Delaware Florida Georgia Hawaii Iowa Idaho Illinois Indiana Kansas Kentucky Louisiana Massachusetts Maryland Maine Michigan Minnesota Missouri Mississippi Montana North Carolina North Dakota Nebraska New Hampshire New Jersey New Mexico Nevada New York Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Virginia Vermont Washington Wisconsin West Virginia Wyoming
      Available in 12 states and Washington, D.C.
    • California
    • Colorado
    • Washington, DC
    • Florida
    • Georgia
    • Maryland
    • Massachusetts
    • New Jersey
    • New York
    • Oregon
    • Pennsylvania
    • Virginia
    • Washington

    Feature Breakdown

    Origination Fee 3% - 5%
    Investment Range % 5% - 10%
    Investment Range $ Up to $250K
    Credit Score Range 550 - 800
    Immigration Status Considered
    • U.S. Citizen
    • U.S. Permanent Resident
    Employment Statuses Considered
    • Employed Full-Time
    • Employed Part-Time
    • Other
    • Retired
    • Self-Employed
    Intended Use
    • Investment
    • Primary Home
    • Secondary Home
    Military Status
    • Active Duty Military
    • Military Dependent
    • Non-Military
    • Veterans
    Shared Equity Use Case
    • Equity Cash-Out
    • Mortgage Down Payment
    Verification Documents Required
    • Government Issued Photo ID
    • Proof of Identity
    • Proof of Residence

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