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For many Americans, their homes are their best and most valuable personal investments. However, for years the only way to use their equity in that investment was to tap that home’s value via home equity loans or home equity lines of credit (HELOCs).
Fortunately, homeowners have more options than ever to use their home’s equity to help them improve their financial positions. In addition to the advent of online banking and platforms specializing in these kinds of loans, homeowners also have access to innovative services like those offered by Point.
Let’s take a look at Point, so you can see whether or not their unique business model could be a good fit for you.
Onto our Point.com review!
What is Point? Shared Home Equity Financing
Point (Point Digital Finance) is a financial services company founded in 2014 and headquartered in Palo Alto, California. Unlike a traditional lender, Point will invest in a portion of the equity you currently have, via a deed of trust and memorandum of option on the house.
Point will provide you a payment for that amount, which can range from $35,000 to $350,000. When you eventually sell your home, you will be required to provide Point.com a portion of the proceeds based on the agreement you made to obtain your initial payment.
Since this essentially is a sales proceeds agreement and not a loan, you as a homeowner will not be required to make monthly payments and will retain significant control of the home as well.
- Shared equity home loan
- Debt-free home financing
- Fractional home ownership
- Responsible debt
- Wealth diversification
- Home equity loan alternative
- Mortgage alternative
- Zero monthly payments
- HELOC alternative
- HELOC refinancing – pay off your HELOC
- Reverse mortgage alternative
Point.com Pros and Cons
There are several pros and cons to consider before opting to use Point; here are a few of the most important ones.
- No Monthly Payments. Since Point’s equity investment is not a loan, you won’t be saddled with monthly payments like you would if you had gone the traditional route and obtained a HELOC or home equity loan.
- Liberal Credit Requirements. While Point does require you to meet some credit rating and debt-to-equity thresholds, their program is considerably more forgiving than comparable home equity and HELOC application requirements.
- Simple Application Process. Applying for Point’s program is simple and, other than the appraisal, can be done entirely online.
- Property equity liquidation: There are numerous reasons why someone would need to convert the equity in their home to cash. It could be to upgrade the building, buy another flat, or settle essential expenses. Point allows for the acquisition of cash on credit without the hassles of obtaining a loan.
- Convenient repayment structure: Point does not charge borrowers a prepayment penalty. The borrower can repurchase equity in his or her home at any time during the transaction’s thirty-year term. Typically, equity is recovered through a home sale, a home loan, or a refinance.
- Control. In order to obtain funding from Point, you will have to agree to have a deed of trust on your property; this could limit some of the control you have to make decisions about your property such as renting, renovating or refinancing it.
- Unclear Buyout Terms. It can be difficult at times to ascertain exactly how much money you would need to buy back Point’s share in your home’s equity.
- Costly Repayment Term: Point’s financial product has a rather tricky repayment term. Since Point charges homeowners the value of the equity they offer, a 3 percent to 5 percent charge on their investment, and a 15% to 40% charge on the appreciated value of the home during buyout, the total cost of its service is obviously high, despite efforts to make it appear otherwise.
Features of Point
Early Access to Home Equity
Point provides timely access to a home equity line of credit for their customers. The equity service provider awards these credits based on home equity value, with a maximum price of $350,000 and a minimum price of $25,000. It is also worth noting that Point does not affiliate itself with the user’s property, so the platform does not require collateral from homeowners.
There Are No Monthly Payments
One of the best aspects of Point is the lack of a monthly payment. This financial platform allows its clients to plan repayment schedules using a kind of roadmap calendar. Customers are advised to use the Home Equity Investment, abbreviated as HEI, for the best results in terms of quick pay-back arrangements. The reason for this is that the faster the loan is paid off, the better the monthly liquidity.
Because there is no collateral, Point is legally lenient with homeowners. Furthermore, this home equity line of credit has several repayment options, including home equity loans. Most of Point’s clients are able to live in their homes with ease because there are no serious legal consequences if an equity loan is not repaid. This gives homeowners a sense of power and control over their homes.
Unlocked Equity Is Present
The presence of unlocked equity is another important feature of Point. This is a unique home equity credit feature that can be used for a variety of purposes including debt repayment, home renovation, and investment alternatives. It was created to assist customers in reducing their high credit, which is a common financial burden.
Long Repayment Period
Aside from the ability to increase monthly cash flow, Point provides a maximum of 30-years for repayment of equity credits and also allows users to repay using dividends from investments and other home equity providers.
Agreement on Home Value Dependent Buyback
One of Point’s major advantages is the dependence of home value on the buyback contract when the agreement is officially canceled. This feature allows users to repay the loan based on their income, and a small percentage of the home appreciation value is added to the original cost. As a result, the greater the appreciation, the greater the payback, and the lesser the depreciation, the smaller the repayment amount.
In order to be eligible for Point home equity, the home in question must be located in select areas of:
- New Jersey
- Washington DC
- New York
- North Carolina
Additionally, applicants must have sufficient credit and debt to equity as well. The home in question must be worth at least $200,000, and as the homeowner, you will need to retain at least 30% of the equity in your home after Point’s investment. Additionally, in some cases, Point may require the homeowner to retain even more equity.
More of our Point.com review is below.
How it Works
Although Point’s home equity investment product is considerably different than a home equity loan or HELOC, the online application process is similar. Applicants provide some basic information to Point on their website, which only takes a few minutes. Once the information is uploaded, Point’s automated system will let you know whether or not you are pre-approved and will provide you a tentative equity investment offer; that offer is typically in the range of 5 to 10 percent of your home’s overall value.
If you decide to proceed, you will then fill out a more detailed equity investment application. You’ll need to have your home appraised, after which Point will send you a final offer. Then, if you accept it, you will sign the Point Homeowner agreement, a Deed of Trust will be filed, and then a Memorandum of Option on the property will be completed. Following these actions, you will receive your funds from Deed within four days or so. Overall, successful transactions take about four weeks on Point.
RELATED: Shared Equity Mortgages.
Some More Fine Print on Homeownership
In most traditional scenarios for homeownership, you won’t be able to cash out all of your home’s equity until it’s fully paid off. Nonetheless, even if it takes a little bit of time to realize it, building up equity is a good deal for most people. In any case, recognizing it’s going to take a while to build up value, it makes sense to shop for a home that appeals to you. Inform a bank that you like the house and request funds to purchase it.
Then, once you buy your dream home, you’ll have to pay the bank back every year for decades before you’ve amassed enough equity in your home to do anything worthwhile with it. If you wish to take advantage of any of your home’s equity while you’re still paying off your mortgage, you will have to either refinance or obtain a home equity loan or home equity line of credit (HELOC). The issue is that any of these traditional equity tapping solutions will result in you accruing even more debt.
What if, instead, you could get a lump sum of money equal to a fraction of your home’s equity to cover urgent financial obligations? That is exactly what Point aims to accomplish. You will never have to pay Point back in monthly payments if you use the platform to get cash from your home’s equity. You may, however, terminate the transaction at any time before the conclusion of the 30-year period.
If your home appreciates in value, you will repay Point the lump money as well as a percentage of the current value of your home. On the other hand, if the value of your property decreases, Point will share in the loss as well. Unlike a standard home equity line of credit, you receive a flat sum of cash and do not have to make monthly payments with Point.
Point does not become a co-owner of your property if you sell shares in your home equity to them. When you elect to discontinue the agreement, they are just a partner in the home’s value change. Just like a traditional lender, the platform uses a Deed of Trust to protect their interest in the property.
Point is available in the following states:
- New Jersey
- Washington, D.C.
- New York
- North Carolina
Point Customer Service
Customers who want to contact Point can do so via the following options:
- Phone: 888-764-6823 hours are MON-THUR 6 am – 6 pm PST, FRI 6 am – 4 pm PST. Closed on Saturdays and Sundays
- Email is [email protected]
- Points Mailing Address is P.O. Box 192, Palo Alto, CA 94302
RELATED: Unison Co-Investing Mortgages.
Point has a rating of 4.4 stars with 199 reviews on Trustpilot, which is an excellent score. Of those reviewers, 68 percent of them gave Point an excellent review, while only 6 percent rated the company’s services as bad. Additionally, Point has been accredited with the Better Business Bureau since 2015, and currently carries an “A+” rating with the BBB.
Keep reading for more of our Point.com review.
The primary alternatives to Point are traditional and online lenders offering HELOCs, home equity loans personal loans, and reverse mortgages. You should definitely review the pros and cons of all of these options before determining the best way to access and use your home’s equity.
Point mortgage alternative competitors:
Frequently Asked Questions
We answer the most common questions with our Point.com review below.
Is Point a genuine company?
Is Point.com legit? Yes, Point is definitely legit. The platform’s financial services are clearly stated, particularly on their website. The rates charged to prospective homeowners are disclosed, and they are competitive. The terms available with Point aren’t much different than those available with most institutions offering similar HELOC services, though they aren’t cheap in the real sense. All requests, like those on other platforms, are subject to pre-qualification, and those who do not qualify are not eligible for a home equity line of credit.
Additionally, Point is considered to offer one of the most successful home equity lines of credit available. The platform won the Finlab award in 2017, a prestigious prize organized by the “Center for Financial Services Innovation.” Point is a credible, transparent, and dependable equity credit source that has received favorable ratings from Forbes and the Better Business Bureau, among others. Point equity credit has been used by millions of homeowners across the country since its inception.
What advantages does Point have over a home equity line of credit, refinance, or home equity loan?
Point has four distinct advantages over other home equity service providers. The first is that Point does not follow a monthly repayment schedule. Second, in comparison to other home equity providers, point investments are much easier to qualify for. Third, your payback amount with Point is linked to the original value of your home. This literally means that the depreciation in the value of your home will reduce the cost of the buy-back. Finally, it is one of the most reliable equity service providers for property owners.
What does Point cost?
Point is a free home equity service platform that charges a fixed percentage of the current inflation price of the home in addition to the original value. The minimum percentage charged is 25%, while the maximum is 40%, and the cost is determined by the conditions of the home appreciation. Point also deducts transaction fees, home assessment fees, and asset or escrow costs.
How is the initial value of my home determined?
Point determines the original value of your home using home assessment, or appraisal. Point will come to your home for a live-home inspection after you apply, using the services of a third-party appraisal team. Once an appraised value has been determined, approximately 78 percent of that figure will be used to calculate your home appreciation cost. This projection protects you from the financial risk of home depreciation.
Point.com Review Parting Thoughts
If you need to access your home’s equity, Point is definitely an innovative and unique option to consider. While Point’s services have some clear drawbacks, they could be a good fit for your current financial situation. So, check out what Point has to offer, and see if their services will work for you.
Find Out If You Qualify For Shared Equity With Point.com
Get up to 350k with no monthly payments, ever.
Enjoy our Point.com review?
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