When homeowners are looking for ways to tap into their home equity, Unison is often one of the first companies that come up. But what is Unison? What does it do? Is it worth it for homeowners to enter into a shared equity agreement with Unison? In this article, we will take a closer look at Unison and answer all of these questions and more.
A shared equity agreement is an arrangement in which two parties (in this case, Unison and the homeowner) agree to share any increases or decreases in the value of an asset in exchange for cash to the homeowner.
Unison is a company that offers shared equity agreements to homeowners. Under a Unison shared equity agreement, the company agrees to invest an amount of money (equal to 25-30% of the home’s value) in the property, which comes to you in the form of cash up front. In exchange for this investment, Unison becomes a co-owner of the home and receives a percentage of the profits when the home is sold.
This arrangement can be beneficial for homeowners because Unison shoulders some of the financial risks if the home value decreases. Unison also does not charge interest on the money they invest in your home, which can save homeowners a significant amount of money over time.
Here are the three main reasons why homeowners might choose to go into a Unison shared equity agreement:
Shared risk: Unison shoulders some of the financial risk if your home value decreases, which can give homeowners peace of mind.
No interest payments: Unison does not charge interest on the money they invest in your home, which can save homeowners a significant amount of money over time.
Flexibility: Unison’s shared equity agreement is flexible, and homeowners can choose to buy Unison out at any time.
Unison can provide homeowners with the cash they need to pay for home improvements, consolidate debt, or make any major purchases. Unison’s investment is based on the future value of your home, so you won’t have to make any interest payments on the money you borrow from Unison in the meanwhile.
To qualify for Unison, you must:
- Be a homeowner with equity in your home
- Have a credit score of 620 or higher
- Have a debt-to-income ratio of 36% or lower
- Be current on your mortgage payments
- Own a single-family home, townhome, or condo
Unison is currently available in the following states:
- New Jersey
- New Mexico
- New York
- North Carolina
- Rhode Island
- South Carolina
- District of Columbia / Washington D.C.
- Unison can provide homeowners with the cash they need without incurring any interest payments.
- Unison’s shared equity agreement is flexible, and homeowners can choose to buy Unison out at any time.
- Unison is available across several states, unlike some other shared equity agreement companies (i.e. Splitero)
- If your home decreases in value upon selling it, you simply owe Unison what they gave you minus the proportional loss in value of the home, resulting in a net gain for you.
- Unison is still only available in certain states, so be sure to check whether or not Unison is available in your state before signing up.
- Unison requires homeowners to have a credit score of 620 or higher to qualify.
Unison is only available for single-family homes, townhomes, and condos. Unison is not available for co-ops, manufactured homes, or investment properties. Another property restriction is that you can’t be a student or a renter, which means you have to own the home outright, for obvious reasons.
If you’re a homeowner looking for ways to take advantage of your home equity, Unison may be worth considering. Unison’s shared equity agreement can provide you with the cash you need without incurring any interest payments, and their agreement is flexible, so you can choose to buy Unison out at any time.
We like that it’s another option for homeowners to consider outside of the usual conventional ways of tapping into your home equity. The main factor to consider is if the equity you are giving up in your home is worth the short-term cash. If your house value goes up significantly, you may have given up a lot of potential profit. On the other hand, if your house value drops or stays the same, you may actually benefit from the whole arrangement.
Even though shared equity agreements are not the conventional way of doing things, debt-free instant cash in exchange for equity in your home is an enticing offer, especially if you’re struggling to come up with a down payment for a new home or to manage existing debt.
As always, before signing an agreement this major, we recommend that you speak with a licensed financial advisor to see if shared equity agreements are the best option for your specific situation. We hope this Unison review has been at least somewhat helpful in your decision-making process!