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Do you need to tap into your home’s equity? Perhaps you would like to pay off all those high balances on your credit cards or some other type of debt. Or maybe you would like to tackle a home improvement project but need a cash infusion to get things rolling.
Using your home’s equity can be a great way to get the cash you need to deal with problems and projects big and small. In the past, the primary way to access your home’s equity was through a lender, via a home equity loan or home equity line of credit (HELOC).
However, thanks to innovative companies like Noah, you can now get cash from your home’s equity without taking on any sort of debt at all. Let’s take a look at Noah and how its equity investment process works, so you can determine whether or not it is a good fit for you.
Onto our Noah.co review!
What is Noah?
Noah, formed in 2016 and headquartered in San Francisco California is an innovative finance company that supports homeowners. Noah’s key service is allowing homeowners to tap into up to their home’s equity without taking out any sort of loan.
Instead, eligible homeowners simply apply to receive a cash payout for a share of their home’s equity from Noah and agree to pay back Noah’s investment, with any agreed-upon appreciation, at some point in the future.
Using Noah’s equity investment services lets you avoid tying up your credit and managing monthly payments that you’d otherwise have to do with a traditional home equity loan or HELOC.
So, you’ll have cash in your bank account to use and will still be able to access your credit to make other major life purchases as well.
The platform offers homeowners the opportunity to seek loans using their home equity. With Noah, homeowners get to keep their homes while getting the cash they need to address pressing financial needs, make renovations, or get seed money for a new business venture.
Overall, when you use Noah, you get to keep your home with a ten-year maximum equity repayment structure, which gives you the time and space you need to use the money the way you see fit without the added stress of immediate payments. Here are some features that make Noah stand apart.
Key Features of Noah
Noah.co review key features.
Cost and Fees
There are several fees associated with Noah. For starters, there are the basic registration fees which are common amongst all financial services providers.
When getting on the platform, you would pay a one-off fee for registration and other initial services. Then you would move to apply for the investment stake in your house. In most cases, the platform would assess your property in order to ensure it has a greater value than the sum you seek.
When the investment sum has been disbursed, Noah gives you a period of up to 10 years to repay the sum borrowed and interest on your property. So, beyond the loan sum and any interest, those registration fees are the main expenses you would contend with when using Noah.
While working with Noah, the homeowner is responsible for maintaining the property in question, since possession doesn’t pass from the homeowner to Noah during the transaction.
Additionally, after the investment has been made, Noah expects homeowners to keep a standard insurance policy for the home. Homeowners are also expected to pay all taxes, rates, or bills on the property from the day of the investment until the overall transaction is complete.
Noah goes the extra mile to investigate your home to diligently observe some of the suited fittings and fixtures that are bound to keep their value up; the financial platform expects that you keep these fixtures and fittings in the proper and tenantable condition during the period of the investment window.
RELATED: Shared Equity Mortgages.
Renovated Homes on Noah
Homeowners can renovate their properties throughout the investment period. In fact, in most cases, a homeowner will not have to notify Noah when they decide to upgrade or renovate their property.
However, when it comes to repayment, renovations can pose some challenges. Some home renovations can cause your overall property value to increase significantly, which would leave you liable to pay more interest to Noah on the value of your home when it comes time to close out the transaction.
There are some ways for homeowners to avoid larger payments due to Noah when it comes to remodeling their homes. One way would be to have the value of the property calculated at the start of the transaction with the renovations in mind.
Noah would then provide you the investment money upfront for the renovation, and at the conclusion of the transaction, you as a homeowner wouldn’t occur significant additional liabilities to Noah. Instead, Noah would calculate its interest based on the renovated home and the owner would tap into the value of the home by selling at a higher price at the market.
Planning for the renovations before using Noah’s service is definitely a wise choice and can leave you off the hook for additional home appreciation charges. However, before doing so, ensure you get a second opinion from a realtor in the area on the estimated increase in value on any planned renovation.
Once that is done, you can compare the investment deal by Noah side by side with the possible return on investment to see the gains or otherwise.
Repayments on Noah
Noah has a limited term of 10 years for the repayment of the investment and the interest on your property’s value. If your home is sold during the term, your term ends on the exact date of sale and the value of your home is examined before it passes to the purchaser.
One unique feature of Noah when paying your investment and home interest sum early enough is that the platform offers you “early exit discounts” which are a form of prepayment discounts given to homeowners that swiftly pay up their sum. The early exit discounts are grouped into three and are available to homeowners that pay up within three years of the investment.
You should know that discounts also apply to the total buyout amount of the property in question. The discount structure is:
- For the first 12 months, homeowners get a discount of 10% of their total sum payable.
- For the 12th to the 24th month of the investment, homeowners get a percentage of 7.5% off the payment.
- From the 24th to the 36th month, homeowners get a total percentage of 5% off their payment sum.
The remainder three years and above offer no discount to homeowners when paying their investment sum and the interest in their homes.
Homeowners should note that this discount offered relates to the total payment to be made, which includes the investment sum with the interest payable and not just the interest alone.
For instance, if Noah offers you a loan of $30,000 and your home has a value of $5000, the total sum payable is $35,000. If you decide to pay within 12 months, your sum payable would total $31,500 only.
Noah’s Investment Limit
Noah has limits on its investment, just like other financial platforms that allow you to tap into your home’s equity. First, you should note that the platform is currently available in just ten states, and depending on where you live in the US, you may not have access to Noah’s services.
While it may expand at some point in the future, if you are not in one of the states where Noah operates you’ll be ineligible for its services, and will have to find some other means to tap into your home’s equity.
When using Noah, you can tap up to 20% of your home’s total value. This means if your property is valued at $1 million, Noah would offer you the option to receive up to $200,000 in cash.
However, Noah has a maximum investment limit of $350,000. So, if your property is worth $2 million, Noah’s 20% equity cash out of $400,000 would not apply in your case and you would only be able to take a maximum of the $350,000 investment ceiling on the platform instead.
You should note that your proceeds in the investment are dependent on your home’s value and the expected equity to get from it. Noah would always conduct due diligence on your home to determine its overall value and then will provide you a clear estimate on how much of an equity payout you can derive from your home.
Home Protection on Noah
Noah offers your home a variety of home protective features through its popular homeowner protection program. This feature is one of the best features that sets the financial platform apart from other competitors in the market.
Noah provides homeowners with additional funds and assistance when they fall into financial difficulty. For instance, if they want to make a property tax payment, emergency repairs, or get a mortgage on their property, the financial platform provides the needed support that is required to put you back on track with your finances.
What is most surprising is that Noah provides homeowners with additional funds up to $10,000 depending on their property profile and term. It also takes less than 5 days to have the additional funds paid in your account and it gets paid with ease.
Nonetheless, there is usually a processing fee, and the amount taken isn’t treated as an investment as is the case of the original investment sum made but is treated as a loan with interest to be paid on the sum. You can however pay back at any time to limit the interest payable on the sum, but Noah would not collect any installments on the payments, the sum should be paid outright in full.
More of our Noah.co review below.
To be eligible for Noah, your home must be located where Noah operates. Noah currently provides services to homeowners in California, Colorado, Washington DC, Maryland, New Jersey, New York, Utah, Oregon, Utah, and Washington State.
The home itself must be valued at between $300,000 and $3,500,000, and you must have at least 25 percent of the equity invested in it.
You cannot have more than two liens on the property, such as a mortgage or HELOC, and cannot be undergoing construction beyond minor renovations or repairs.
The homeowner requesting Noah’s services should have a credit score of 600 or greater, and a debt to income ratio of 60 percent or more.
The homeowner applying to work with Noah also must not be undergoing a bankruptcy proceeding, either.
Noah equity sharing services are only available in the following states:
- Washington DC
- New Jersey
- New York
- Washington State
How it Works
Working with Noah is simple and straightforward, and the entire process occurs almost entirely online. You simply go to Noah’s website and fill out an online form to apply which takes five to ten minutes.
Noah will then provide you an initial nonbinding estimate of how much home equity you could tap into. If you’re interested, you fill an additional, more detailed application; you will also need to have a home appraisal completed as well, the one step of the process that occurs offline.
Once all of these steps are complete, Noah will present a final offer for providing a home equity cash-out. If you accept it, the funds will be transferred to your account in a matter of days.
There are no payments required on Noah’s investment in your home equity and the equity investment is made on a ten-year time horizon. At some point along that horizon, you’ll have to pay back the share of equity Noah invested in your home.
If your home appreciated during that time, you’ll have to pay more; if it went down, you’ll be required to pay less.
Read on for more on Noah home equity below.
Customers who want to contact Noah can do so via the following options:
- Phone:415-578-6515 Monday thru Friday from 8:00am-6:00pm PST.
- Email: [email protected]
- Online. You can also complete an online query form to contact Noah as well.
Noah Home Equity Reviews
Noah, formerly known as Patch, has a rating of 4.6 on Trustpilot with over 50 reviews. This is considered excellent, although the overall number of reviews the company has received thus far is modest. 89 percent of the reviews that Noah received on Trustpilot are excellent, while only 2 percent of them are considered bad. Noah has been accredited with the Better Business Bureau since 2017 but does not currently have a BBB rating.
Keep reading for more of our Noah.co review.
Noah Pros and Cons
Noah.co review pros and cons.
There are several pros and cons to consider before opting to use Noah equity; here are a few worth considering.
- No Monthly Payments. Like other home equity investment counterparts (see below), using Noah allows homeowners to avoid having to make the monthly payments they’d otherwise have to contend with if they’d tapped into their home’s equity with a traditional loan or HELOC.
- Easy. Almost the entire Noah process occurs online, so you can apply to use the company’s services from the comfort of your own home.
- Home protective features. Noah offers homeowners on its platform seeking funds after the investment sum has been made. These funds should be traced to the overall maintenance or advancement of the home.
- Discounts. Noah offers discounts to homeowners that pay up their investment sum and interest three years early. Homeowners can get up to 10% off their total sum payable simply by paying their sum early.
- Payback Cliff. If at the end of the ten-year term you are unable to settle with Noah, you could be forced to sell the house to meet your settlement obligations, or take out some sort of loan to pay Noah back.
- Service Fee. Noah charges a service fee of either $2,000 or 3 percent of the value of your home when using their services.
- Limited Locations. Noah is located in 10 U.S states only, a significant shortcoming that prevents millions of Americans from tapping into the benefits offered by the platform.
The primary alternatives to Noah are Hometap and Point, both of which offer similar services for homeowners to access their equity. The traditional home equity loans and HELOCs offered by lenders are also alternatives to the kind of services Noah provides.
Hometap: Hometap offers very similar services to the Noah platform. The Hometap platform takes shares in your home value and offers you investments which is payable on a maximum term of 10 years.
Hometap shares many of the same features with Noah, however, there are quite a few differences between the platforms as well. For starters, Hometap only offers investments to homeowners with a credit score of 600 or higher, whereas credit scores and ratings do not figure into Noah’s calculus; when it comes to program approval, all Noah investigates is whether or not the applicant is the true homeowner and whether the home is worth the value of the sum that the applicant is seeking.
Additionally, Hometap offers investments up to 30% maximum on the total value of your home. Conversely, Noah will only offer up to 20% of the total value of the home. The sum from Hometap allows homeowners to tap into more investments and is suited for people with small or medium-large home sizes.
Finally, Hometap offers homeowners a maximum investment of $300,000 unlike Noah’s $350,000. Overall, homeowners with very large or high valued homes would likely prefer Noah over Hometap because of the high maximum investment offered when compared with the Hometap platform.
Noah.co Review: Parting Thoughts
If you want access to your home’s equity without making monthly loan payments or tying up your credit, then Noah may be a great choice for you. While there are some disadvantages to using a home equity investment service, tapping into your equity while avoiding additional debt can be a good option to improve your financial position over the long term.
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