Home equity investments, or shared appreciation, allows you to get paid today for the equity you’ve accumulated in your property—without getting a loan. In exchange, an investor gets a share of your home’s future appreciation (or depreciation). As NerdWallet explains, you’re “allowing a silent partner to take a stake in your home.”

However, equity investments don’t make sense for every homeowner. Determine your current financial situation and goals and compare them to these common scenarios for when it does—and doesn’t—make sense to enter a shared appreciation agreement.

When Home Equity Investments Make Sense

You Have an Immediate Cash Need

If you’re short on liquid money, you can fund your financial need by taking on a home equity investor. For example, you can use the funds from the investment to pay off your credit card debt, particularly cards with high interest. It’s also a smart way to fund your education since, unlike private education loans, a home equity investment has no interest.

You Can’t Afford Additional Monthly Payments

If you don’t want to or can’t afford additional monthly payments or interest, you’ll want to take a closer look at taking on a home equity investor. Because home equity investments are just that – an investment – there is no interest or monthly payments involved. As such, you’re not obligated to pay off the capital from the investment until the end of the term.

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When to Reconsider Home Equity Investments

You Want to Stay in Your Home 10+ Years

If you know you want to stay put, you may not want to take on a home equity investor. Most home equity investment products, including Hometap, have an effective period of 10 years, meaning you’ll need to repay the amount invested in your home when the effective period is up or sell your home.

You Don’t Have Enough Equity

If you don’t have enough equity in your home, you won’t be able to enter a home equity investment agreement. According to NerdWallet, homeowners typically have half their home paid for prior to entering an equity investment agreement. Calculate your home equity to see where you stand.

If you’re a debt-averse homeowner that needs liquid cash or is having trouble with monthly mortgage payments, you may benefit from a home equity investor like Hometap.

As an investor, not a lender, Hometap makes an investment in your home now. You get cash to help fund your financial goals or needs—without having to sell your home, use up your savings, add yet another monthly payment, or implement draconian lifestyle changes.

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The opinions expressed in this post are for informational purposes only. To determine the best financing for your personal circumstances and goals, consult with a licensed advisor.