Unlock - Home Equity Loans Review
Unlock uses a formula to determine how much of a homeowner’s equity in their property the company will offer as a cash payment. Unlock does not provide home equity loans or home equity lines of credit. Instead, they invest in a portion of the tappable home equity in exchange for a stake in the home’s future value.
Homeowners who participate in an Unlock home equity agreement can use the cash for as long as ten years without making monthly payments or paying interest charges. Unlock gets a percentage of the home’s value (unrelated to the actual sales price) if the homeowner decides to sell. Homeowners can also choose to buy Unlock out to terminate the agreement.
|Mortgage types||Home equity|
|Mortgage amount||Home equity loan available for homes with values between $175,000 and $3,000,000|
Fees are 3% of the payment
Annualized costs are capped at 18% of the lump sum cash payment
|Minimum credit score||500 FICO for primary and vacation properties.
550 FICO for rental properties.
Unlock – Home Equity Loans: Pros
- May provide homeowners who are credit challenged or carry too much debt for a traditional home equity loan with a means by which to access the value of their home equity
- Available to homeowners with credit scores as low as 500 – 550
- Online calculator makes it easy for property owners to see how much they may qualify for based on the home’s value and outstanding mortgage debt
Unlock – Home Equity Loans: Cons
- Non-traditional lending criteria may be difficult to understand
- Unlock places a lien on the homeowner’s property
- Loan fees are high; 3% of the amount of money the homeowner receives from Unlock and a maximum annualized rate of 18%
- Rural properties are not eligible
All Unlock applicants must complete the online application on the company’s website. They must authorize a soft pull of credit, that won’t affect their FICO credit scores.
Unlock requires a copy of the homeowner’s most recent mortgage statement as well as a copy of their state-issued driver’s license, Green Card, or U.S. Passport.
Terms & Requirements
Unlock provides homeowners who may otherwise not be able to get a home equity loan with a non-traditional way to access the equity in their property. Using a number of criteria and formulas, Unlock determines the amount of cash they are willing to pay a homeowner as a lump sum in exchange for a stake in the property’s future value.
When the homeowner sells the property, Unlock receives a piece of the home’s market value (not the selling price.)
Unlock operates only in Arizona, California, Colorado, Florida, Michigan, Minnesota, Nevada, New Jersey, North Carolina, Oregon, Utah, Tennessee, Virginia, and Washington. The company does not work with manufactured homes or raw land.
Home Equity Agreement Requirements
Unlock handles home equity differently than traditional home equity lenders. Homeowners must meet the following standards:
- Citizenship – Permanent Resident Alien with Green Card or U.S. Citizen
- Identity – social security number, unexpired state-issued drivers’ license, U.S. Passport, or Green Card
- Minimum Credit Score – 550 FICO for rental properties, 500 FICO for primary and vacation properties.
- Income/DTI: Not required unless the applicant has a FICO score of 550 or lower, is delinquent on a mortgage
- Applicants with FICO scores lower than 500 must use Unlock cash payment to pay down debt until the backend DTI is 45% or lower at the time of funding
- Credit Events in the Past Five Years – no foreclosure, bankruptcy, short sale, deed in lieu
- Mortgage Delinquencies – maximum of one 90-day mortgage delinquency in the past 24 months
- Judgments Impacting the Property – not allowed
Unlock does not charge interest like home equity lenders. Fees amount to 3% of the cash payment and are due at closing. Fees + other costs to the homeowner are capped at 18% annualized.
Unlock provides lump-sum payments with a maximum of $500,000 or as much as 43.5% of the property’s market value. The company has a maximum loan-to-value of 85%.
Homeowners who receive a lump sum cash payment from Unlock do not make monthly payments like they would with a traditional lender. The repayment agreement is for a percentage of the home’s future value at the time the homeowner decides to sell the property.
Homeowners who choose not to sell their property within ten years of receiving funds from Unlock can buy out the agreement to be free of the debt.
Typical agreements exchange 10% of the property’s current appraised value (which the homeowner receives in cash) for 16% of the property’s future value, with a maximum annualized cost of 18%.
Closing costs include a 3% origination fee plus inspection, appraisal, and records fees.
Privacy & Security
Unlock has an average of 4.7 stars out of five stars across 65 customer reviews on Trustpilot.
There are just five customer reviews on the Better Business Bureau (BBB) website, each providing a five-star rating. Unlock Technologies is not BBB accredited, as they’ve been in business for only one year. They do have an A- rating with the BBB.
Unlock handles customer service in-house, and applicants can contact the company via a form available on the website.
Since there are no monthly payments, homeowners using Unlock to help pay down debt and those who need to free up some room in their monthly budget won’t face new payments. Instead, they’ll pay back the money from Unlock plus a certain percentage out of the proceeds when they sell their home.
Unlock provides property owners with a non-traditional way to access a home’s equity without going through the process of getting a home equity loan. Traditional home equity lenders rely on credit scores and debt levels in part to qualify applicants. With Unlock, low credit scores and higher debt levels don’t automatically disqualify an applicant.
548 Market St # 31036
San Francisco, CA 94104-5401