How Do I Qualify for an Unlock Home Equity Agreement (HEA)? 

If you’re like many homeowners these days, you might be looking for a way to take advantage of the equity you’ve built in your home. But you may have discovered that high interest rates and strict qualification requirements have made traditional loans a less viable option for tapping your home equity. Since a home equity agreement is not a loan, there are no monthly payments, income requirements are flexible, and there is a lower qualification threshold than is typical with home equity loans (HELs) or home equity lines of credit (HELOCs). 

 To qualify for an Unlock HEA, you’ll need to meet several property and personal-finance requirements. Here’s a summary 

Property requirements 

• Type of property. We invest in most residential real estate, including single-family homes, condominiums, townhomes and properties consisting of two- to-four units. We don’t invest in raw land, or any prefabricated homes such as mobile homes or manufactured housing. 

• Ownership. You can qualify if your property is your primary residence, second home or a rental property. Your home can be in a trust if the trustor lives in the home as their primary residence, and all trustees and trustors sign the home equity agreement at closing. We don’t, however, invest in properties with tenancy-in-common (TIC) or co-op arrangements. 

• Location. Your property must be located in a state served by Unlock: Arizona, California, Colorado, Florida, Michigan, New Jersey, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Virginia or Washington state.  

• Homeowner’s insurance. You must carry insurance on the property. 

• Property in good standing. Your property must not be subject to any unresolved or pending lawsuits. 

• Home value. Your home must have a market value of at least $175,000, and no more than $3,000,000.  

• Home equity. You should have at least 40% equity in the property. Your home equity is the difference between the market value of your property and any outstanding loans you have on the property. You can calculate the estimated equity in your home by taking these steps: 

1. Find an appraisal of your home’s current fair market value. You may be able to view this information by looking at recent property tax assessments or through third-party real estate sale platforms.  

2. Find your current mortgage balance, as well as the amount of any other debts you have on the property, such as a home equity loan or home equity line of credit. You should be able to obtain these amounts from recent statements or by looking at your account(s) online. 

3. Subtract the amount of those debts from the fair market value. The remainder will be an estimate of your equity in the home. For example, if your home’s estimated fair market value is $500,000 and the total of all the debt you owe on your home is $300,000, your estimated home equity would be $200,000. 

4. Turn the number into a percent. Divide your home equity amount ($200,000 in this example) by your home’s fair market value ($500,000 in this example). Then multiply the result by 100. In this example, your estimated home equity would be 40%. 

Example: $200,000/$500,000 = .4
.4 x 100 = 40%

Personal finance requirements 

• Credit information. You must have a minimum FICO credit score of 500. (Homeowners with a credit score below 550 should have a debt-to-income ratio of 45%) 
• Income. In some instances, such as with homeowners who have rental properties, we may request income verification to compensate for other factors that may affect the risk of our investment. 

• Mortgage in good standing. There can be no 90-day delinquencies on any mortgage on your property within the last two years, and no 120-day delinquencies on any mortgage within the prior 36 months. No foreclosure action, short sale, or a deed in lieu of foreclosure within the last five years. Also, you can’t be a current participant in a mortgage lender repayment program or a mortgage foreclosure mitigation program.  

• Property in good condition. The condition rating on your property, as described in the Uniform Appraisal Dataset (UAD), must be C4 or better. 

• Citizenship. You’ll need to have a U.S.-issued driver’s license or identification card, U.S. passport or valid Green Card (Permanent Resident card). 

• Outstanding judgments. You must be free of any outstanding judgments. 

• Bankruptcy. No bankruptcies in the last five years. 

With an Unlock home equity agreement, credit score requirements are lower than those of traditional loan products, and income requirements are flexible. Remember that since it’s not a loan or a line of credit, you won’t be taking on any monthly payment. See how much you can qualify for today.