Is an HEI a Good Idea?
The Bottom Line
There's no universal answer. An HEI is rarely the cheapest way to access your home equity, but it can make sense when you're locked out of cheaper financing, either because you can't qualify for it or because you genuinely can't take on a new monthly payment. Compare your own situation against the lists below.
Is an HEI Right for You?
Good Idea If
- You don't qualify for a HELOC, cash-out refinance, or home equity loan. An HEI's underwriting is typically more lenient on credit score and income documentation.
- You need cash-flow relief, such as paying down other debt, and genuinely can't take on a new monthly payment. See HEI Pros and Cons for the full cost picture.
- You need cash but don't want a new monthly payment added to your budget.
- You've weighed the benefits against the cost and the trade is worth it for your situation. No monthly payment and easier qualifying come at a price. Run your own numbers to see what that price actually is for you.
- You're 62 or older and comparing this specifically against a reverse mortgage. Held long enough, an HEI tends to become the cheaper option, especially under flat or modest home-price growth. See HEI vs. Reverse Mortgage for the full comparison.
- You expect your home's value to stay flat or decline over the time you'd hold the agreement. An HEI's payoff is tied to your home's value, so if it doesn't grow, what you owe doesn't grow much either, unlike a reverse mortgage or a fixed-rate loan. Test a flat-market scenario in the cost calculator to see the effect.
Think Twice If
- You can qualify for a HELOC, home equity loan, or cash-out refinance. Those routes are typically cheaper if you can get them.
- You can comfortably afford a new monthly payment. Cheaper financing is usually available if you can service a payment.
- You don't have a plan to settle up, especially on a 10-year HEI. The full balance comes due as one lump sum, and you'll need to sell, refinance, or pay cash.
- You're already struggling to keep up with property taxes, insurance, HOA dues, or your existing mortgage. An HEI doesn't remove these ongoing obligations, and falling behind on them risks foreclosure regardless of the agreement.
See What an HEI Would Actually Cost You
Enter your home details to compare Point, Hometap, Unison, Unlock, and Splitero side by side — eligibility, estimated cost, and year-by-year numbers.
Frequently Asked Questions
Is an HEI a good idea if I can qualify for a HELOC?
Usually not. If you can qualify for a HELOC, home equity loan, or cash-out refinance and can comfortably afford the payment, that route is typically cheaper than an HEI over time. See HEI vs. HELOC for a full cost comparison.
Is an HEI cheaper than a reverse mortgage?
It depends on your holding period and how your home's value changes. Under typical home-price growth, an HEI and a reverse mortgage tend to run close through around year 10, with the HEI becoming the cheaper option the longer you hold past that. In a flat or declining market, the HEI's advantage shows up even sooner. See HEI vs. Reverse Mortgage for the full comparison.
What happens if I can't pay off my HEI at the end of the term?
You settle by repurchasing the provider's share, typically through savings, a refinance, or selling the home. If you genuinely can't do any of those, the worst case is a forced sale or foreclosure, the same risk you'd face with other home-secured financing.