11 Questions to Ask Before Signing a Home Equity Investment (2026)

Home equity investments are sold on a single sentence: no monthly payments. That sentence is true, and it is also the only simple thing about the contract. What decides your cost sits in terms a homeowner may not fully understand until the closing documents arrive: the value the contract starts counting from, whether the provider shares your whole house or only its growth, who picks the appraiser at the end, and what quietly puts you in default along the way.

This guide is the list of questions to put in writing before you sign, with what each provider actually publishes today. If you are still deciding whether the product fits at all, start with our home equity investment guide and our Access Your Reserve hub.

In This Article:

• 1. What Starting Value Does the Contract Use?
• 2. What Percentage Does the Investor Get, and of What?
• 3. Who Picks the Appraiser When You Exit?
• 4. Does the Provider Share the Loss if Values Fall?
• 5. Will Your Home Improvements Be Credited Back?
• 6. Can You Refinance Your First Mortgage Later?
• 7. Can You Settle in Parts or Only at Once?
• 8. What Events Trigger a Forced Settlement?
• 9. What Happens if You Cannot Settle at Term End?
• 10. What Do You Have to Maintain under the Contract?
• 11. Is There a Return Cap, and What Is It?
• Common Questions

1. What Starting Value Does the Contract Use?

HEI providers often measure their return from an “adjusted” starting value rather than your home’s actual appraised value, effectively reducing your baseline equity on day one.

Access your home equity with pre-qualification in minutes.

Provider	Published Starting Value Discount	Impact on Homeowner Equity
Point	27% (Stated on site)	Reduces baseline starting value significantly.
Unison	5.0% (Program Guide)	Standardized discount applied with worked examples.
Unlock	0% (No discount applied)	Uses 100% of appraised starting value.
Hometap	Not Publicly Disclosed	Calculated against future valuation models.
Nada	0% (No discount applied)	Must be requested directly in writing.

How to think about the discount. A discount is not money taken out of your pocket on day one. It is value the contract stops counting as yours, and your actual cost is the provider’s share of that value, not the whole of it. On a $700,000 Arizona home, a 27% adjustment sets the starting value at $511,000, removing $189,000 from the baseline. If the contractual share were 24% of the applicable appreciation, the illustrative effect of that removal would be roughly $45,360, not $189,000, before the agreement’s other variables. That is still real money, and it is the single largest hidden term in most agreements, but describing it as a $189,000 loss overstates it.

The CFPB’s own illustrations use discounts of 25% and 30%, and note that with a 25% discount “the company comes out ahead unless the home’s price decreases by more than 25%.” There is no market-typical figure here. Ask for yours in writing.

2. What Percentage Does the Investor Get, and of What?

An investor’s percentage share is applied either to your home’s total final value or strictly to its appreciation above the starting baseline, and a smaller percentage of total value often costs significantly more than a larger percentage of appreciation.

See if an HEI is right for your situation and check your estimate today.

Provider	Published share	Applies to	Why it matters
Unison	4x the percentage funded, floor 20%, ceiling 60%	Change in value	Publishes the multiple outright, which most do not
Nada	1.85x the cash amount	Its own pages describe both total value and appreciation	Nada’s pricing and how-it-works pages disagree. Ask which governs
Hometap	Tiered. One published example: 10% funded gives roughly a 15% share in years 0 to 3	Its published examples use future home value. Confirm which basis your agreement uses	The full tier schedule is not published
Point	Not published as a formula. One illustration shows roughly 24%	Its public examples calculate from value change above the adjusted starting value	Your agreement and settlement illustration govern the exact figures
Unlock	Not published. Its FAQ refers to “your exchange rate” without a number	Total value	Ask for the multiple before you compare anything else

Why the smaller percentage can cost more. Point’s own comparison page makes this point against its competitors: on identical facts, a roughly 24% share of appreciation cost $175,000 while a 20% share of total value cost $195,000, “because you are sharing a piece of the whole pie.” A share of total value starts collecting from dollar one of your existing equity. A share of appreciation only collects on growth above the starting value. Two offers with similar-looking percentages can differ by tens of thousands of dollars.

3. Who Picks the Appraiser When You Exit?

HWI providers generally retain control of the valuation process or designate the method used, and published homeowner challenge rights vary widely. The CFPB notes that when there is a dispute or no sale, “a third party such as an appraiser hired by the home equity company typically determines the home’s final value,” and that complaints specifically cite valuations too low at origination and too high at repayment.

See if you qualify for an HEI with a brief digital check.

• Unison publishes the only genuine appeal path: either party may request a reconsideration and pay for it, and if disagreement remains, “we’ll use a professional arbitration service to work things out.”
• Point publishes a defined window but not a binding right. You may submit your own appraisal “for consideration” within 60 days, which is an invitation rather than an appeal.
• Hometap most often determines value virtually through an automated model, with a physical appraisal in some cases. If you sell for less than 90% of that value, its share is calculated on the model’s number rather than your sale price.
• Unlock states it will typically obtain an appraisal, with no published dispute process.
• Nada uses third-party automated tools, with a paid appraisal available at your election.

Ask two things in writing: who selects the appraiser, and what your recourse is if the number comes back high. If the answer to the second is nothing, that is your answer.

4. Does the HEI Provider Share the Loss if Values Fall?

HEI providers only absorb losses after home values decline below the contractually adjusted starting baseline, insulating them from mild to moderate market drops.

See if you qualify for an HEI with a brief digital check.

• Point does share losses, but only below the appreciation starting value. Read against its published 27% risk adjustment, your home has to fall more than 27% before Point takes any loss at all.
• Unison shares losses proportionally after its restriction period, and expressly does not during it. Its guide states the ending agreed value will be at least equal to the original appraised value even if your property has fallen, and the same exclusion applies on an early buyout. The protection is unavailable in exactly the first years when a decline is most likely to catch you.
• Hometap characterizes its structure as bearing the risk of losing its investment in a significant decline. That is the company’s own description with no published threshold, and how much downside it actually absorbs depends on the agreement’s valuation, settlement, maintenance and sale-price provisions.
• Unlock says its share will “likely” decline if your home does. Note the hedge.
• Nada describes sharing the risk without publishing a mechanism.

The question to ask is arithmetic: at what percentage decline do you begin taking a loss on this agreement, and will you put that number in writing?

5. Will Your Home Improvements Be Credited Back?

Renovations are only credited back if you receive pre-approval from the HEI provider and document conditions prior to beginning construction. Two HEI providers publish an improvement adjustment, and both attach conditions that have to be met before you start work, not after.

Access your home equity with pre-qualification in minutes.

• Unison credits documented improvements, but only after the three-year anniversary. You must notify Unison before beginning any significant project, supply detailed close-up and wide before photos, and accept an independent third-party appraiser’s before-and-after comparison. Routine upkeep such as paint and carpet does not qualify.
• Unlock states it does not share in value created by your improvements, subject to a hard floor: the project must add at least $10,000 in value, you need building permits, and you need photographic evidence of the original condition.
• Point and Nada publish no improvement adjustment.
• Hometap lists a question titled “Do you offer renovation adjustments?” on its FAQ, but the answer is not retrievable, so ask for the terms directly.

The adjustment runs both ways. Unison adds back value lost to deferred maintenance, and Unlock applies a maintenance adjustment that protects Unlock if the property degrades. Improvements may or may not be credited to you depending on the provider, but neglect is charged to you at both companies that publish terms.

6. Can You Refinance Your First Mortgage Later?

Shared appreciation agreements generally violate Fannie Mae subordinate financing guidelines, meaning an HEI often must be fully settled rather than subordinated during a conventional mortgage refinance.

See if an home equity investment is right for you with no credit impact.

Fannie Mae’s subordinate financing rule states that unless it qualifies as a Community Seconds loan, an agreement obligating a borrower to pay a third party a share in any appreciation in the value of the subject property is not permitted. Source: Fannie Mae Selling Guide B2-1.2-04.

The practical consequence is that the usual fix, having the agreement move behind your new first mortgage in line, is often unavailable. Settling becomes the path, which means finding the lump sum at a moment you did not choose.

This matters most for the homeowner who takes an HEI specifically to protect a low mortgage rate. If rates fall during your term, the agreement that let you keep your rate may be the thing standing between you and a better one. Portfolio, non-QM and government programs may take a different view, but both your lender and your provider have to agree. Ask the provider whether it will subordinate, ask in writing, and ask before you sign rather than in year six. Our guide to refinancing a mortgage with an HEI in place covers the mechanics, and this is a Fannie Mae conventional rule rather than a universal one, so other loan programs may differ.

7. Can You Settle in Parts or Only at Once?

Assume a single lump sum unless the contract says otherwise, because only one major provider publishes a partial buyout mechanism. The CFPB confirms the market norm: homeowners can usually repay in full early, but “they generally can’t make partial payments.”

Curious if you qualify for an HEI? Get an estimate with no credit impact.

• Unlock is the exception and publishes the terms. You may buy out in partial payments at any time over the ten-year term without penalty. The limits: Unlock may decline a partial buyout if your remaining percentage would fall below 25% of the original, each partial buyout requires an appraisal you pay for, there is a processing fee each time, and Unlock recommends payments of at least 25% of the payoff amount.
• Point publishes a lump sum process only, releasing the lien once the full payoff is received.
• Unison publishes full exits only: sale, a full early buyout, maturity, or death.
• Hometap describes a full repurchase at the then-current value of its share, with no partial mechanism published.
• Nada offers full settlement by refinance, cash or sale, or rolling into a new ten-year agreement.

If you expect to settle gradually out of income or bonuses rather than in one event, this question alone may decide which provider works for you.

8. What Events Trigger a Forced HEI Settlement?

Failure to maintain primary residence status, unauthorized title transfers (such as moving property into an LLC), or unapproved secondary liens can trigger immediate contract default.

See if an HEI is right for your situation and check your estimate today.

Ask for the complete enumerated list, because only two of these providers publish one and the examples homeowners worry about most did not appear in any public disclosure we reviewed. This is the largest disclosure gap in the category.

What is published. Unlock lists mortgage, tax or insurance delinquency, property deterioration, unauthorized liens, zoning violations, insolvency, bankruptcy, misrepresentation, unauthorized sale or transfer, and failure to settle at term end. Unison lists material uncured default, plus failure to notify it of an intent to sell, condemnation, bankruptcy, fire damage, new liens, or ownership changes involving people who did not sign.

What we could not find in public materials. Whether transferring title into an LLC or a trust triggers default. Whether ceasing to occupy the home as your primary residence triggers default. Whether taking on additional debt against the home triggers default, beyond Unlock’s general reference to unauthorized liens. These appear constantly in commentary about HEIs as though they were standard terms. We did not locate a current public disclosure addressing any of them, and the closest published language, Unlock’s “unauthorized sale or transfer” and Unison’s “ownership changes involving non-signatories,” names neither LLCs nor occupancy. That does not mean your agreement is silent on them. It means the answer lives in the contract rather than the marketing.

We found no default trigger list in public materials from Point, Hometap or Nada. That is not evidence there are none. It means the list exists only in the contract you have not read yet, so ask for it and read it before signing.

9. What Happens if You Cannot Settle at Term End?

Ask what the provider does on the day after your term ends, and get the answer in writing, because no provider publishes a grace period. The CFPB warns plainly that homeowners who cannot pay the settlement “could be forced to sell their homes” or “face foreclosure,” and its consumer advisory describes the obligation as “a balloon payment at the end, often two to three times as much money as you got at the beginning.”

See if an home equity investment is right for you with no credit impact.

Unison’s program guide is the most explicit published statement of the endgame: at its outer limit, Unison “has the right to exercise its option and purchase its interest in your property,” and “in rare cases this may even involve Unison putting the house into foreclosure.” Nada publishes an alternative, allowing a homeowner to roll into a new ten-year agreement, which solves the deadline while restarting the cost clock.

The questions worth writing down:

• How many days after the term ends before you begin enforcement?
• Is an extension available, at what cost, and is it guaranteed or discretionary?
• Will you accept a partial payment at that point to buy time?
• What is your process if a refinance is in progress but not funded?

If you expect to still own the home at term end, this question matters more than the percentage.

10. What Do You Have to Maintain under the Contract?

You remain fully responsible for the mortgage, property taxes, insurance and the condition of the home, and failing on any of those can put you in default. The agreement gives the provider an interest in your property without giving it any of the carrying costs.

Expect obligations covering:

• Property taxes and insurance, kept current, often with specific minimum coverage requirements
• The first mortgage, kept current, since default on a senior lien is a published trigger at multiple providers
• Physical condition, with Unison adding back value lost to deferred maintenance at settlement and Unlock applying a maintenance adjustment that protects Unlock if the property degrades
• Notice obligations, since Unison’s list includes failure to notify it of events such as new liens or ownership changes
• Occupancy, at providers whose agreements require the home to remain your primary residence

Ask for the insurance coverage minimum in a number, and ask what documentation the provider can require from you during the term and how often.

11. Is There a Return Cap, and What Is It?

Some HEI providers cap their maximum annualized return, but cap rates are typically set high enough that they only apply in extreme appreciation scenarios.

See if you qualify for an HEI with a brief digital check.

Always ask whether the agreement caps the provider’s return, what the rate is, and whether the cap expires. Two providers publish a rate, two name a cap without publishing its rate, and one appears to have none.

Provider	Cap	Rate published	Why it matters
Hometap	20% annualized, with a published formula	Yes	You can calculate your worst case before signing
Nada	19.99% per year annualized	Yes	Same, and the two published caps are nearly identical
Point	Homeowner Protection Cap, compounded monthly over the term	No	Described in detail with the rate withheld. Ask for it
Unison	Equity Appreciation Limit, compounded monthly	No	Applies only during the restriction period, then stops
Unlock	No cap stated in its FAQ	No	Ask whether one exists at all

A cap is not the same as protection. Hometap publishes its formula as the initial investment multiplied by 1.20 raised to the number of years. On $100,000, that permits $248,832 at year five and $619,174 at year ten. That is the ceiling, not the expected outcome, but it is the number the cap actually guarantees you against. The California DFPI makes the same point in its alert, warning that caps “may be set high enough that they offer little real protection.”

Unison’s structure deserves separate attention. Its program guide states the limit applies during the restriction period and “does not apply after the restriction period.” Unison’s current public materials describe a 30-year equity sharing agreement, so confirm which program version governs your offer before relying on this. A cap that expires before your term does is worth asking about specifically.

Questions to Ask Before an HEI: Common Questions

See if you qualify for an HEI with a brief digital check.

EquitySquirrel is an educational resource operated by Scout Media LLC, not a lender or home equity agreement provider. This content does not constitute financial, legal, or investment advice. Provider terms vary, are subject to change, and are summarized here from publicly available materials; confirm current terms directly with each provider. Regulatory actions described are allegations unless otherwise stated and remain unresolved. Consult a licensed financial professional and an attorney before signing a recorded agreement against your home. Aleksandra Kadzielawski, Lic #SA694336000.