Point

Point Review

Point is offered by Point Digital Finance, Inc, a financial services company founded in 2014 and based in Palo Alto, CA. Point is available in 16 states (and Washington, DC).

• Poor credit accepted. Homeowners with a credit score as low as 500 can qualify with Point.
• Maximum investment of $500,000. Your actual offer will depend on the value of the home and how much equity you have in the property.
• Long contract terms. Point offers a contract term of 30 years, which provides homeowners with plenty of flexibility. Most home equity investors have a maximum term of 10 years.
• Share of home appreciation. Unlike most shared equity investors, Point's return depends on your home's appreciation rather than the home's entire value. When the contract ends, the buyback cost will be the original investment plus 15% to 40% of the home's increase in value. If your home has lost value, Point will also share in the loss.
• Cash-out only. Existing homeowners can access up to 22.5% of their property's value without taking on debt. Funds can be used for anything, from paying off debt, renovating or retirement.
• Only available in select states. Point is currently available in 16 states.

How does the Point product work?

A shared equity agreement (also called home equity contract) is essentially a way to sell a portion of the equity in your home to an investment company.

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 is designed for homeowners who need cash for reasons such as home improvement project or to eliminate debt.

Point will have a lien on the property (just like a mortgage does), but since it's not a loan you won't be paying Point interest or a monthly payment. Instead Point gets paid a share of your home's value when the contract ends, which typically occurs when you decide to sell your home or buy Point out. For example, Point might provide you with a cash investment today equal to 10% of your home's current value in exchange for 16% of your home's future value when you sell.

How much will Point Digital Finance, Inc invest into a shared equity agreement?

The Point program offers equity investments that range from 0% up to 22.5% 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. The most Point Digital Finance, Inc can invest in a single home is $500,000.

What are the costs associated with Point?

Unlike loans, the cost associated with an Point Digital Finance, Inc investment is not based on an interest rate. There are no monthly payments or accrued interest. Instead, Point Digital Finance, Inc shares in the future value of your property and typically only receives a return on its investment when you sell your home or decide to buy Point Digital Finance, Inc out. The percentage of your home’s value that Point Digital Finance, Inc shares when the contract ends is larger than the percentage of Point Digital Finance, Inc's investment in your home. Therefore, Point Digital Finance, Inc will make a profit if your home’s value does not change. If your home’s value increases, Point Digital Finance, Inc will make a larger profit. If the value drops, Point Digital Finance, Inc will make a smaller profit, or might incur a loss.

The Point program includes an origination fee equal to 3% of the Unlock investment. This will reduce the amount of cash that you receive at closing. There are also expenses that are typical for any real estate financing transaction, such as appraisal, inspection and closing costs.

Unlock’s profit on its investment is subject to an annualized cost limit (typically 18%), Your cost for the Unlock money can never exceed the limit. In many cases, and depending on how long the contract remains outstanding, the cost will be significantly lower.

What are the terms for a shared equity investment via Point Digital Finance, Inc?

You can use the funds provided by Point for up to 30 years. After 30 years, you will need to settle up with Point Digital Finance, Inc, either by selling the home or buying Point Digital Finance, Inc out. You can finance a buyout with your cash, refinancing your mortgage, or by partnering with Point Digital Finance, Inc for another term.

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 Digital Finance, Inc?

Point will typically fund a deal within 45 days.

What types of property does Point Digital Finance, Inc 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.
• Investment properties.