Unlock Review 2022 |  The bank rate
Unlock Review 2022 |  The bank rate

If you’ve made regular mortgage payments, you’ve built up equity in your property. This equity can help you secure money for other big expenses like paying for college, eliminating debt, and renovating your home.

San Francisco-based Unlock Technologies is designed to help you access that money. The company does not offer home equity loans or home equity lines of credit (HELOCs), which use your home as collateral and come with monthly payments and finance charges. Instead, the company uses a home equity agreement that functions as an investment. You give the company an equity stake in the property in exchange for the money they receive today, while Unlock shares in the profits of your property’s appreciation. It’s similar to how a shareholder would share in the profits of a company’s rising market value.

Unlock has been around since 2021 and is accredited by the Better Business Bureau. Past customers also give it high marks. The company has a rating of 4.6 out of 5 – excellent – based on nearly 90 Trustpilot reviews. For now, these customers are limited to just 15 states. Unlock operates in Arizona, California, Colorado, Florida, Michigan, Minnesota, Nevada, New Jersey, North Carolina, Oregon, South Carolina, Tennessee, Utah, Virginia and Washington.

How Unlocking Works

Unlock pays you money today for the chance to get a share of the proceeds from the sale of your home up to 10 years later. The company will offer between $30,000 and $500,000, depending on your property, finances, and amount of capital.

A typical deal might give you 10% of your home’s value in exchange for 16% of its future value. For example, if your house is worth $300,000 today, you could borrow $30,000. Eight years later, your house is under contract for $400,000. When you close the deal, you need to unlock $64,000.

Owners have several choices on how to complete the agreement. They can sell the house at any time or buy back the equity in the house gradually or over time. Once the agreement is reached, the borrowers will repay according to the original terms (for example, 10 for 16%).

To work with Unlock, you’ll need to create an account and submit a few pieces of information: your government-issued ID, proof of homeowners insurance, and previous mortgage statements. The preliminary approval process takes approximately 60 seconds. If the terms look good, you’ll need to spend another 5-10 minutes completing a full application. This starts the usually 30-day process that includes an appraisal and home inspection. According to Unlock, the process can go as quickly as 10 days.

Who is the right candidate to apply with Unlock?

If you need immediate access to cash and have accumulated at least 20% equity in your home, Unlock might be a good match. The company requires a FICO score of just 500, so it may be an especially good choice for someone with poor credit who might struggle to get a home equity loan or HELOC approved.

For example, if you’re struggling to make minimum payments on a lot of high-interest credit card debt, Unlock might be a good solution. By eliminating your debt today, you can avoid continuing to accumulate costly finance charges.

Unlocking conditions and fees

Unlock’s agreements all run for a period of 10 years. Once you sign a contract, the company places a lien on your property. After a period of six months, if you wish, you can begin to redeem the company’s interest in your home with partial payments or a lump sum. Once your contract expires after 10 years, you will either have to buy Unlock out or sell your house.

Unlock has no monthly payments or interest charges. However, you will be responsible for the 3% set-up fee and your home appraisal and inspection fee. You will also be responsible for covering the costs of recording the transaction with the appropriate recorders. These expenses vary depending on the size and location of your home, but appraisals typically range between $300 and $450, with home inspections priced similarly. Notary and title fees can vary, but if you’re considering working with Unlock, get a pre-estimate of any additional fees.

Advantages and Disadvantages of an Unlock Agreement

Getting some money quickly without having to make any payments or incur additional interest is appealing, but there are pros and cons to “unlocking” that money. Weigh the immediate benefits against the potential long-term consequences before signing on the dotted line.

Advantages

  • No monthly payments
  • No finance charges
  • A minimum credit score of only 500 to qualify
  • No income condition
  • Flexible credit check, which does not affect your credit score

The inconvenients

  • You won’t make as much money selling your home
  • Assembly fees, plus other appraisal, inspection and registration fees
  • Unlocking is only available in 15 states

How Unlock Compares to Other Home Equity Sharing Companies

Unlock isn’t the only company that operates on a cash-for-future-equity approach. Consider how it compares to those other names that have a similar business model.

To open Noah Unison
Minimum eligibility requirements Credit score of 500 Credit score of 580 Credit score of 620
Mandate’s duration 10 years 10 years 30 years
Settlement (amount you owe) based on A percentage of the final value of the house A percentage of the final value of the house A percentage of the difference between the initial value and the value at the end of the term
Costs Origination fee of 3% of the investment amount, plus valuation inspection and registration fees $2,000 or 3% of the investment amount (whichever is greater), plus a range of other potential fees 3% of the investment amount, plus expert and settlement costs
Available slots Arizona
California
Colorado
Florida
Michigan
Minnesota
Nevada
New Jersey
North Carolina
Oregon
Caroline from the south
Tennessee
Utah
Virginia
Washington
California
Colorado
Massachusetts
New Jersey
New York
Oregon
Utah
Virginia
Washington
washington d.c.
Arizona
California
Colorado
Delaware
Florida
Illinois
Indiana
Kansas
Kentucky
Massachusetts
Michigan
Minnesota
Missouri
Nevada
New Jersey
New Mexico
New York
North Carolina
Ohio
Oregon
Pennsylvania
Rhode Island
Caroline from the south
Tennessee
Utah
Virginia
Washington
washington d.c.
Wisconsin

The bottom line

If you need an instant influx of cash, Unlock is a simple solution that won’t impact your monthly budget or burden you with additional interest charges. The company’s other big draw is its willingness to work with owners with credit scores as low as 500.

However, it is important to understand what you are giving up to get your money. One of the great benefits of owning a home is the ability to build wealth so you reap the reward of an increase in value when you sell it. With Unlock, you could forfeit a large portion of your sale price. Plus, you could find yourself in a corner with having to pay it back in 10 years. If you’re not ready to move at the time and don’t have the money to buy out the deal, you may regret your decision.

Whenever you make a decision that involves your most prized asset (your home), think carefully about how you intend to use the money and the implications for your long-term financial well-being.

Content Disclaimer: Unlock content creation costs for this page. However, the information is based on our unbiased opinion and the vendor did not contribute to the review.

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