There is a new way to take cash out of your home with no monthly payments and no interest. It's not a loan. It's not a mortgage. It is a contract with an investor who wants to purchase some of your home equity in cash—but it can be costly in the end.
California-based Point is a 2-year-old fintech company specializing in home equity contracts. It offers homeowners cash for a share of the home's equity, that is, the amount the home is worth beyond the value of the mortgage. It will give up to $250,000 depending on the value of the home and the strength of the real estate market that the house is in.
"This started four years ago from personal experience. I was in between jobs and looking to get a refinance to invest in my business, but I was denied by all the banks," said Eddie Lim, co-founder and CEO of Point. "Why is debt financing my only option? The irony is the biggest asset I own, the biggest asset that most of us own in our lifetimes, all we can do is add more debt, so that's where Point came in."