Home Equity Investment (HEI)
You get cash in exchange for a share of your home’s future value — no debt, no monthly payments.
Home Equity Investment
A home equity investment (HEI) is an alternative way for homeowners to access cash by tapping into their home’s equity — without taking on debt like a loan or line of credit.
How it works:
- An investor gives you a lump sum of cash in exchange for a share of your home’s future value.
- There are no monthly payments or interest.
- The investment is typically repaid when you sell your home, refinance, or at the end of a term (often 10–30 years).
Key Features:
- No monthly payments
- You keep living in your home
- You don’t give up ownership — just a share of future appreciation (or depreciation)
- Good for homeowners who are equity-rich but cash-poor, or who can’t qualify for traditional loans.
When to choose what
| Situation | Best Option |
|---|---|
| Need cash, but income is tight | HEI |
| You want ongoing access to funds | HELOC |
| You want to refinance and cash out | Cash-out Refi |
| Your credit score isn’t great | HEI (usually more flexible) |
Here’s a breakdown of how a Home Equity Investment (HEI) stacks up against a HELOC and a cash-out refinance,with pros and cons for each:
HEI you get cash in exchange for a share of your home’s future value — no debt, no monthly payments.
Pros:
No monthly payments.
Easier qualification (often based more on your home’s equity than credit/income)
Access to cash without increasing debt
Good option if your income is inconsistent or tight
Cons:
You share in the appreciation (or depreciation) when you sell or settle
Can be more expensive than a loan if your home increases significantly in value
Terms can be complex — varies by company
HELOC (Home Equity Line of Credit)
A revolving line of credit, like a credit card, secured by your home’s equity.
Pros:
Flexible access to funds over time
Lower interest rates than credit cards
You only pay interest on what you use
Cons:
Monthly payments required
Variable interest rates can rise or compound
Requires good credit and income
Risk of foreclosure if you can’t repay
Cash-Out Refinance
You refinance your mortgage for more than you owe and take the difference in cash.
Pros:
Can get a lower interest rate (if market rates are favorable)
Fixed payments over a known term
Access to a large lump sum
Cons:
Replaces your current mortgage — including closing costs
Increases your monthly payment
You take on more debt