Home Equity Sharing
When one wants to tap into the equity of their home, as the image above illustrates, one usually has 3, main, options, that just about anyone can use:
Option 1: HEL (Home Equity Loan),
Option 2: HELOC (Home Equity Line Of Credit),
Option 3: Cash Out ReFi (Refinance).
Each of these have pros and cons. HELOCs are generally considered the “easiest,” whereas the Cash Out Refi is considered the “hardest,” where the HELs fall in between. What you need to keep in mind, for all of these is that in most, if not all, circumstances, while you will have “cash” for your investment options, you will now have two debts: your original mortgage (or new mortgage, for the ReFi), and your new loan.
However, there is one more, main option, that involves no monthly payments and no interest! It is “equity sharing.” Investors will loan you an amount of money—ranging from 10 – 20%--and charge you no interest or monthly payments.