This Unison HomeOwner review details a new way to access your home's equity. Discover its pros and cons, and see if it's a good fit for you.
Mortgages

Unison HomeOwner Review: Access Home Equity Without a Loan

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This Unison HomeOwner review details a new option for accessing your home’s equity. We’ll discuss how the Unison HomeOwner plan works, the pros and cons of the program, and whether or not it’s a good fit for you. Enjoy!

Do you want to access your home equity? How’d you like to do it without taking out another loan?

A new program from Unison can help. It’s called Unison HomeOwner, and it allows you to tap into your home’s equity without acquiring another monthly payment.

Sound interesting? Let’s take a look.

Who Is Unison?

This Unison HomeOwner review details a new way to access your home's equity. Discover its pros and cons, and see if it's a good fit for you.Founded in 2004, Unison is a relatively new company based in the San Francisco area. They have made over $300 million dollars in residential real estate investments and are funded mainly through institutional investments like university endowments and pension funds. Funding from Unison is currently available in 30 states and the District of Columbia.

Now, if you’ve ever lived in the Bay Area, you know how expensive housing prices are there. Unison was created as a new way to help buyers afford the homes they want and assist current homeowners access their equity without acquiring more debt.

With two separate funding programs, Unison caters to both homeowners and home buyers. Prospective buyers can receive up to 50% of their down payment. Although this piece focuses on the homeowner side of things, you can learn more about funding your down payment and avoiding P.M.I. by reading our complete Unison HomeBuyer review.

Unison at a Glance

  • Founded in 2004
  • San Francisco area company
  • Over $300 million invested to date
  • Funding available for homeowners and buyers
  • Available in 30 states and Washington, D.C.

How Does Unison HomeOwner Work?

Unison HomeOwner seeks to provide a new way for homeowners to access their equity without acquiring new debt. Unlike traditional home equity loans or HELOCs, working with Unison means you won’t have a monthly bill to pay. You’ll also avoid those pesky interest payments.

Through the Unison HomeOwner program, you can access up to 20% of your home equity and receive a cash payment right away. Use that money to fund home remodeling projects, pay off debt, or do anything else you’d like. You’re free to use the money for up to 30 years or until you sell the house, whichever comes first.

In exchange, Unison claims a percentage of the increase in your home’s value when you sell. From what I can gather, this is equal to 4 times the amount you fund. You’ll also be charged a 2.5% transaction fee upon receiving the funding.

Essentially, Unison is making an equity investment in your home. By providing your home equity funding, they invest in your home with you. If the value of the home goes up, they share in the increase. Should your home lose value, they make less money as well…although their return will never be less than the amount they funded.

Unison HomeOwner Availability

The Unison HomeOwner program provides current homeowners an opportunity to tap into their home equity in exchange for a share of the home’s increase in value upon its sale. As of March 2019, the program is available to residents of 30 states and the District of Columbia, including:

  • Arizona
  • California
  • Colorado
  • Connecticut
  • Delaware
  • Florida
  • Georgia
  • Illinois
  • Indiana
  • Kansas
  • Kentucky
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Missouri
  • Nevada
  • New Jersey
  • New Mexico
  • New York
  • North Carolina
  • Ohio
  • Oregon
  • Pennsylvania
  • South Carolina
  • Tennessee
  • Virginia
  • Washington
  • District of Columbia / Washington D.C.
  • Wisconsin
  • Utah

Unison HomeOwner: Inside the Numbers

As I’ve already mentioned, Unison provides access to your home’s equity in exchange for a share in your home’s change in value upon its sale. According to their homepage, you can fund up to 20% of your home’s value through this program. Additionally, you are not allowed to dip below an 80% loan to value ratio, which is fairly standard practice for accessing your home equity.

Now for the hard numbers. From what I’ve found, Unison’s share is equal to 4 times the amount you fund, based on the percentage of equity you pull from the house. So, if you tap 10% of your homes equity, Unison claims a 40% stake on the increase of your home’s value from that point forward.

That probably seems like a huge number, and it is.

With that said, there are some exceptions. If you use the money to fund a remodeling project, for instance, you can file what they call a “Remodeling Adjustment.” This allows you to retain 100% of the increase in value that is directly attributed to the remodel. This helps make the program more palatable, but that is still a huge chunk of money.

While you don’t have to make interest payments, trading a share of your home’s equity going forward could potentially cost you more than interest payments would have. It is extremely important that you run all of the numbers and carefully consider all of your options before moving forward with any type of home equity funding.

Advantages of Unison HomeOwner

This Unison HomeOwner review details a new way to access your home's equity. Discover its pros and cons, and see if it's a good fit for you.

Why choose Unison HomeOwner to access your home’s current equity? Here are a few of the most important benefits of going with Unison.

#1) It’s Not a Loan

Unlike home equity loans or HELOCs from a bank, funding through Unison does not come in the form of a loan. That means there are no monthly payments and you won’t pay interest. For somebody who despises debt, that seems like a pretty good thing.

On the other hand, you are exchanging a percentage of your home’s future value for securing the funds. Be sure that this makes financial sense before proceeding.

#2) You Have Flexible Options

One of the best things about Unison HomeOwner is that you can use the money for anything you want. That means you can use your home’s equity to remodel your house, pay off credit card debt, pay for college, or anything else you can dream up.

With that said, I always caution against using funding methods to supplement overspending. Don’t do it. As with any funding source, it’s super important that you don’t use this money to dig yourself an even bigger hole.

#3) Provides a Unique Way to Access Equity

Unison HomeOwner is unique in that it allows you to access your home equity without taking on more debt. As somebody who loathes debt, this certainly speaks to me. Of course, you’ll also be giving up a large chunk of equity moving forward, so there is that…

Unison HomeOwner Review: Other Benefits

  • Buyout is Available – After three years, you have the option of buying out Unison’s claim to your equity. This is definitely something to consider if conditions are right.
  • 30-Year Limit – With Unison HomeOwner, you have access to the funds provided for a whopping thirty years or until you sell the house, whichever comes sooner.
  • You Own Your House – Although Unison retains a claim on the percentage of your home value’s growth, they are essentially a silent partner. The house is yours to do with as you please, provided you don’t let it fall into disrepair.

Disadvantages of Unison HomeOwner

Although Unison does provide a unique way to tap into your home equity, there are certainly some major issues to consider.

First and foremost, in exchange for the funding, you are giving up a substantial amount of equity in the growth of your home’s value. Now, if you want to bet against your home rising in value, that’s one thing. However, the growth in value could easily outpace the amount you would have paid in interest through a traditional HELOC or home equity loan. If that’s the case, you’re almost certainly losing money.

Additionally, you’ll need to pay a 2.5% transaction fee upon receiving the funding. That’s not unusual, but it could cost you quite a bit, depending on the amount you fund. You may also be required to pay for third-party fees as well.

Finally, you’ll need to keep good records of any remodeling projects you choose to do. By filing a Remodeling Adjustment, you can save a significant portion of your home’s appreciated value if the project directly adds to an increase in value of your home. You should also keep in mind that “value” is considered the fair market value as determined by an appraisal and is not based on the amount of money you spent.

Alternatives to Unison HomeOwner

This Unison HomeOwner review details a new way to access your home's equity. Discover its pros and cons, and see if it's a good fit for you.Before making any financing decision, it’s always important to explore all of your options. While certain products are a great fit for some, they may not be the right move for you. Carefully consider the numbers before pulling the trigger.

Although Unison HomeOwner is unique in its approach, a more traditional approach could be more beneficial for your situation. Here are a few options to consider:

Home Equity Loan – This is a type of loan in which you receive a lump sum that is borrowed against the fair market value of your home. To repay the loan, you are required to make monthly payments, including interest fees, over a certain period of time.

Home Equity Line of Credit (HELOC) – This is an open line of “secured” credit which uses your home’s equity as collateral. Like with a credit card, you’ll have a credit limit. You’ll also be required to make monthly payments, including interest, on any balance you carry.

Cash-Out Refinance – With a cash-out refinance, you are refinancing a mortgage that you currently have into a larger loan. You then receive the difference between the two loans in cash. You’ll owe more on your home, but you’ll leave with cash in hand.

Who Might Consider Unison HomeOwner?

  • Those needing money now who aren’t concerned about long-term gain. – If you need access to your home’s equity now and have no concern for long-term gains, Unison HomeOwner may be a good fit.
  • Those betting their home value will decrease. – If you need cash and think your property value will decrease, this may be a good option. Of course, Unison has to believe that your home value will rise. You’ll also need to keep your home in good condition or Unison can claim more money based on a “Deferred Maintenance Adjustment.”

Unison HomeOwner Review: Final Thoughts

To be perfectly honest, I believe that tapping into your home’s equity – in any form – is rarely a good move. Why in the world would you want to pay back that money more than once? That’s my opinion and I’m sticking to it.

With that said, I know people are still going to do it. Unison HomeOwner provides another avenue.

If you need access to your home’s equity, need it quickly, and don’t care about forfeiting a percentage of your long-term gains, this could be for you. Likewise, Unison HomeOwner is a good option if you want to bet against a future increase in your home’s value.

Whatever you do, don’t pull the equity out of your home to supplement your overspending habits. You’ll simply find yourself further behind than you were before.

If you’ve run the numbers and feel like it works out in your favor, you can get prequalified with Unison HomeOwner here.

Thanks so much for reading my Unison HomeOwner review! Good luck and be sure to do your due diligence.

What do you think of Unison HomeBuyer? Let us know in the comments below!

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18 Comments

  1. Greg, I’m thinking I could use Unison to take $100K equity from my home and do a 3-4 flips with my contractor and real estate friends. Obviously the numbers for the deals would have to work, but it seems to be a good way to get the mortgage down payments and $$ for rehabs, Then put the profits aside to pay Unuson back in 3 yrs. by then I’d have cash flow to fund myself. Thoughts?

  2. Is This a Reverse Mortgage

  3. Lonnie B Burns says:

    I am recently divorced and I have a judgment that’s extremely high. I want to use the money to get readjusted financially. I’m only 3 years from retirement and I think this will help me.

  4. We did this loan and I and my husband are pleased. We are seniors and this allows you a chunk of equity that you don’t have to make payments on monthly. They collect when the house becomes sold with a percentage of any increased value. We live in Cali, real estate is hot so they may come out ahead, but it will lessen what we leave and allow us to live debt free with money in the bank. Although prices keep rising I personally believe we will hit a wall before too long. The economy appears good but the debt is going to catch up before long. This company makes sure there is nothing hidden in their practice and your home is valued by a third part appraiser, not them. If your like us and your heirs are nicely provided for, this makes sense for you to do things you want have cash tucked away and not more debt on your back. We recommend this program.

  5. I am contemplating applying for a portion of the equity in my house but after reading I am totally confused. Is this a good or bad investment to make?? I need to free myself of those pesky credit cards and other small debts and just concentrate on my first mortgage payment.

  6. In your article, you stated that:
    “Should your home lose value, they make less money as well… although their return will never be less than the amount they funded.”

    I received a mailing from Unison that has a graphic showing what happens when the house appreciates, stays the same, and depreciates in value. For the appreciate scenario, the graph shows that they earn 40% of the increase in equity based on 10% that they invest in the house. So, for a 500K valued house that appreciates to 600K (100K increase), they invest 50K and will get 90K when house is sold. On the other hand, the graph shows that if the house were to lose 100K in value (from 500K to 400K), Unison will get 10K only and not their original 50K. So, they lose 40% of the decrease in value.

  7. I’m tempted to think this model might actually work for me. Please correct any faulty reasoning.
    I live in San Francisco. We owe roughly $330,000 on a house estimated at approximately 1.7 million.
    My wife and I are now experiencing reduced earnings and won’t be able to keep up with our mortgage soon.
    Unison estimates that they may be able to give us $309,000. That and a bit of savings would allow us to pay off our mortgage.
    Without the big monthly mortgage payment we could afford to stay in our home.
    Doesn’t that sound like a reasonable plan?

    1. You may end up owing them a huge amount even though your mortgage is paid off. they will ultimately collect a huge percent of that equity you’ve already built up and you will likely never be able to buy them out as from what i understand the equity they get paid on is based on the original purchase price of the house (so if you bought it for 500k and it’s 1.7 mil they already have 40% of 1.2 million you owe them either when the house sells or 30 years whichever’s first). you’re better off just selling that thing asap.

  8. Thanks for this informative article, Greg! Just got a flyer in the mail and came across your article on this company. As you suggested, I will crunch the numbers between Unisom and conventional lending and see what makes the most sense. Again, thanks for your review of this alternative financing!

  9. I just got a Unison offer in the mail. To update your readers, the transaction fee if 3.9% o the Unison investment. It’s not on my list of things to do.

  10. Rick Mariani says:

    I own my home but have a small mortgage. I am semi retired and am living mostly on my social security. When I am entirely on my social security it will be hard for me to make a mortgage payment and live on the rest. If i do this unison loan I can pay off my mortgage and have no payment or interest for 30 years. I am not going to live for another 30 years. I have been thinking of selling my home and moving to a cheaper area where I can buy a home for cash and not have a mortgage payment. However if I do this loan I can live here with all my friends around until I die. Since I have no kids and don’t care if I leave anything for any other family members I think this may be the solution for me to not have to sell my home and move to a red state to live out my years. Of course I can always buy a place with more room or a small rental for extra income if I move to a cheaper area. I am 70 and in ok health but have diabetes and stents in my heart so I am not going to live for 30 more years. I like my house and community here and can still make money with side jobs from my old business for a few more years.
    Do you think this is a good scenario for me or should I sell and move while I still can?

  11. Some marketing person sent me a phony official looking letter from Unison. Would never do business with a company that comes across initially as scammers.

  12. Very good review, and an eye-opened for me. I recently spoke to a Unison customer service rep. I am not sure of this is a good option for me or not. But you nailed it “Stop the overspending habits”. Thank you!

  13. James Sjoblom says:

    AS we age, my wife and I are receiving more of this type of “help”. 40% (the rate of return) seems to be quite high. Making 10 % annually in the stock market (including REIT’s) are more than satisfactory. If you don’t need the money, I would stay away from this. A Real Estate professional may be the cheapest way of selling your house. One of us will live our present home to another 30 years. We do not plan to go to an assisted living residence (God Willing). It is cheaper for us to reside in our house as long as we can. We are 70 plus.

  14. We are likely to do this. Home improvements and additions that add value are credited back. Unison does not get any portion of the added value (i.e. you built a garage, an addition to the house, etc.). The initial processing fees are 3.5% and Unison does take a loss if the value drops below initial valuation. It is a high interest investment if you pay it back early. However, if you’re in it for the longevity (30 years) there is no saying where real estate values will be then. Unless you have a crystal ball :), then let’s just look for the lottery numbers lol.

  15. What would your thoughts of this for childless married couple who do not have any plans on selling until after death? Are you able to refinance to pull out additional money for a second home purchase?

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