Key Takeaways
- Settling a home equity investment involves repaying the provider to restore full ownership of your home.
- Your primary options for settling without selling are a HELOC, home equity loan, or cash-out refinance.
- Begin the settlement process well before your agreement ends, as securing financing may take several weeks or months.
If your home equity investment agreement is ending, you can repay it without selling your home, but you will need a plan to secure the required funds. This guide explains how to determine your payoff amount, when to start the settlement process, and how to use options such as a HELOC, a home equity loan, or a cash-out refinance to repay the investor while keeping your property.
In this article (Skip to...)
- What is an HEA?
- What settlement means
- How much you owe
- Ways to settle
- When to start settlement
- How to initiate settlement
- After you settle HEI
- FAQs
What is a home equity agreement?
A home equity agreement (HEA), also known as a home equity investment (HEI), provides you with cash upfront in exchange for a share of your home’s future value. This is not a loan. There are no monthly payments, interest charges, or additional debt during the agreement. HEI companies such as Hometap, Point, and Unlock offer home equity agreements that provide cash now in exchange for a share of your home’s future value.
Check your HEI settlement eligibility. Start here- No monthly payments: Unlike a HELOC or home equity loan, you won’t make regular payments during the term.
- Settlement required: At some point, usually within 10 to 30 years, you’ll “buy back” the company’s share and end the agreement.
What does it mean to settle your home equity investment?
Settling your home equity investment means making a lump-sum payment to the investor to end the agreement and regain 100% ownership of your home. According to the Consumer Financial Protection Bureau (CFPB), this payment includes the original cash you received plus a share of your home’s appreciation, which can be significantly more than the initial amount.
Explore your eligibility to settle your HEI. Start hereMost homeowners settle when they sell their home, but this is not the only option. If you wish to remain in your home, you can use financing such as a HELOC, home equity loan, or cash-out refinance to raise the necessary funds.
How much will you owe when you settle your HEI?
Your final HEI settlement amount depends on the terms outlined in your original agreement. You do not simply repay the amount you received, because the payoff is based in part on your home’s current market value.
Verify your eligibility to settle your HEI. Start hereHome appreciation share
The HEI provider is entitled to a percentage of the increase in your home’s value since the agreement began. For example, if your home appreciates by $100,000 and the provider’s share is 25%, you owe an additional $25,000 beyond the original amount you borrowed.
Original investment amount
You’ll also repay the original cash amount the HEI provider gave you. Think of this as the principal portion of your settlement.
Risk adjustment and fees
Some contracts include a risk adjustment that may increase the final amount. You may also owe administrative or settlement fees. These details vary by HEI provider, so review your original home equity agreement carefully.
If your home value decreases
If your home has lost value, you may owe less than in an appreciation scenario. However, most contracts include a minimum repayment amount, often referred to as a floor, to protect the provider’s initial investment. Even if your home’s value has declined, you will likely still owe a significant amount.
Comparing your HEI settlement options
| Option | Best for | Payment structure | Timeline to close |
| HELOC | Flexible access, uncertain exact amount | Variable rate, interest-only during draw period | 15–45 days |
| Home equity loan | Predictable fixed payments | Fixed rate, fixed monthly payment | 2–6 weeks |
| Cash-out refinance | Lowering first mortgage rate, larger amounts | Fixed rate, replaces existing mortgage | 30–60 days |
| Personal savings | Avoiding new debt | No payments | Immediate |
Ways to settle your HEI without selling your home
Selling is the most common way to repay a home equity investment, but it is not the only option. If you wish to remain in your home, you can use other financing sources or assets to generate the funds needed to settle the agreement.
Check your HELOC and home equity loan rates. Start here- HELOC: A home equity line of credit provides a revolving credit limit secured by your home. Because the final settlement amount often depends on an updated appraisal, a HELOC can offer flexibility by allowing you to draw only the amount required once the payoff figure is confirmed.
- Home equity loan: A home equity loan provides a lump sum at a fixed interest rate with fixed monthly payments. This option works well when you know the settlement amount and want predictable repayment terms.
- Cash-out refinance: A cash-out refinance replaces your existing mortgage with a new, larger loan and gives you the difference in cash. It may be appropriate if current mortgage rates are competitive or if you need more funds than a HELOC or home equity loan would allow.
- Personal savings or investments: Using liquid assets to repay your HEI allows you to avoid new debt, but it reduces your cash reserves or investment holdings and may have tax implications depending on the assets used.
How to settle your HEI with a HELOC
A HELOC can work well when the final settlement amount depends on an updated appraisal. Its revolving structure allows you to draw only what you need once the payoff figure is confirmed.
Step 1: Confirm you qualify and have enough equity
Before applying, review your combined loan-to-value ratio, credit score, debt-to-income ratio, and income stability. Most lenders require a minimum credit score of about 620 and limit CLTV to 80% to 90%. If your existing mortgage balance plus the HELOC exceeds this range, you may not qualify for sufficient funds to fully settle the HEI.
Step 2: Compare lenders and complete underwriting
Request quotes from several HELOC lenders to compare rates, fees, draw periods, and repayment terms. After applying, submit income and asset documentation and complete an appraisal to confirm your home’s current value. Underwriting typically takes 15 to 45 days.
Step 3: Draw funds and begin repayment
After approval, draw the amount needed to pay your HEI provider and satisfy the agreement. You will then be responsible for HELOC payments, which are usually interest-only during the draw period and convert to principal and interest during repayment.
Compare HELOCs with multiple lenders. Start hereHow to settle your HEI with a home equity loan
A home equity loan may be preferable if you know the exact settlement amount and want a fixed interest rate with predictable monthly payments.
Step 1: Verify eligibility under lender guidelines
Confirm that your credit score, CLTV, and DTI meet lender requirements, which usually include a minimum score of 620 and sufficient remaining equity after the HEI payoff. Lenders will also review income stability to ensure you can support the new fixed payment.
Step 2: Compare fixed-rate loan offers
Obtain quotes from several lenders and review the interest rate, APR, loan term, and closing costs. Because this is a lump-sum loan, even small differences in rate can significantly affect total interest paid over time.
Step 3: Close the loan and repay the HEI
After underwriting and appraisal are complete, you will close on the loan and receive the full proceeds. Use these funds to pay the HEI provider in full and terminate the agreement. You will then begin making fixed monthly payments.
Check your home equity loan options. Start hereHow to settle your HEI with a cash-out refinance
A cash-out refinance replaces your existing mortgage with a larger loan and provides the difference in cash. This option works best when you need substantial funds or can improve your current mortgage rate.
Step 1: Evaluate whether refinancing makes financial sense
Compare your current mortgage rate and remaining term with available refinance rates. Since refinancing restarts amortization and replaces your existing loan, proceed only if the new structure benefits you or provides sufficient funds to settle the HEI.
Step 2: Apply and complete full mortgage underwriting
Submit documentation for income, assets, and debts, and complete a property appraisal. Underwriting follows standard mortgage guidelines and typically takes 30 to 60 days, which is longer than for most HELOCs or home equity loans.
Step 3: Receive proceeds and satisfy the HEI
At closing, you receive the cash difference between your old mortgage balance and the new loan amount. Use these funds to repay the HEI provider and conclude the agreement. You will then make payments on the new mortgage.
Explore cash-out refinancing rates. Start here
When to start the HEI settlement process
Begin the HEI settlement process well before your agreement’s term ends to avoid last-minute delays. Starting at least 45 days in advance to allow time for appraisals, underwriting, and funding, though starting earlier provides more flexibility for unexpected issues.
If you plan to use a cash-out refinance or anticipate a complex approval process, start 6 to 12 months ahead to ensure you meet lender requirements and avoid deadline pressure. Contacting your HEI provider early also provides a preliminary payoff estimate and confirms any specific timeline or documentation requirements.
How to initiate an HEI settlement
Once you choose a payoff strategy, work directly with your HEI provider to confirm the amount owed and complete the buyout.
- Request a settlement estimate: Ask your provider for a preliminary payoff amount to guide your financing.
- Complete the appraisal: The provider orders an appraisal to determine your home’s current value and final payoff.
- Review the final statement: Confirm the repayment breakdown, including your original funds, appreciation share, and any fees.
- Close financing and send payment: After your HELOC, loan, or refinance funds, the provider receives payment and releases its claim.
What happens after you settle your home equity investment
After you make the final settlement payment, the home equity investment provider releases its claim or lien against your property, and you regain full control of your home’s equity. The HEI agreement is terminated, and you no longer owe any future share of appreciation.
If you used a HELOC, home equity loan, or cash-out refinance to fund the payoff, that new financing replaces the HEI obligation, and you are now responsible for making regular monthly payments under the terms of that loan.
Verify your eligibility to settle your HEI. Start hereFind the best HELOC or home equity loan for your HEI settlement
You can settle your home equity investment without selling your home by choosing the right financing plan. Comparing lenders for a HELOC, home equity loan, or cash-out refinance helps you find terms that meet your needs.
Time to make a move? Let us find the right mortgage for you
FAQs about settling a home equity investment
If you cannot afford to settle by the deadline, you may be required to sell your home to pay off the HEI provider as outlined in your contract. In some cases, the provider may offer an extension, so it is important to contact them well in advance to discuss your options.
The settlement formula is typically fixed in your original contract and is generally not negotiable. However, you may be able to discuss the timing of the settlement or request a review if you believe the third-party appraisal is inaccurate.
Most lenders require a minimum credit score of 620-680, though specific requirements vary by lender. Shopping around is the best way to find a lender whose criteria match your financial profile.
Consulting a tax professional is a good idea, as an HEI settlement may have different tax implications than traditional loan repayment. The IRS may treat the appreciation share paid to the provider differently from mortgage interest.
