What To Do If You’re House-Rich But Cash-Poor
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Oct 30, 2023
|7 min
Key takeaways:
- Being “house-rich” is great because it means you have an asset that has likely appreciated in value.
- Being “cash-poor” is a real problem, because it means that you don’t have easy access to cash to cover expenses
- There are options out there to help you use your house wealth to pay the bills.
It may seem like an odd problem to have: if you’re one of the many Americans who are “house-rich,” you have a home or a property that’s worth a lot, at least on paper. But it’s usually coupled with “and cash-poor,” which suggests you don’t have a lot of money coming in to pay the bills. If that’s you, you’re not alone.
More than a third of homeowners (34%) surveyed by Unlock in September 2025 said they had less than $1,000 in an emergency savings fund, making it difficult to manage unexpected expenses. At the same time, homeowners have seen the value of their homes soar in recent years. In the second quarter of 2025, homeowners with mortgages had home equity of $17.5 trillion collectively, or just over $300,000 each on average, according to information services provider Cotality.
The challenge is how to access the wealth you have tied up in your home. The good news is that there are ways to turn home equity into cash beyond selling your home. Here’s a look at the options.
What Does it Mean to be House-Rich and Cash-Poor?
Being house-rich and cash-poor means that most of your wealth comes from your home rather than from liquid assets like savings, checking accounts, or individual stocks and bonds. The Pew Research Center estimates that half of U.S. homeowners derive more than 45% of their wealth from home equity alone. In comparison, financial accounts and vehicles contributed only a median of 5% to the total net worth of U.S. households.
If you have significant equity in your home, but fall short of having the cash flow you need to meet your monthly obligations (car payment, utilities, groceries, etc.), or handle big bills, you might be house-rich and cash-poor. Having a healthy amount of liquid assets provides more financial flexibility, since those assets either provide access to physical cash or can be converted to cash relatively quickly when needed.
How Do You Become House-Rich and Cash-Poor?
Becoming house-rich and cash-poor can happen to anyone. A job loss or major medical bill can not only make it difficult to save money, but can also force you to dip into savings or other accounts, which can leave your liquid assets depleted.
The rising cost of living, coupled with stagnant wage growth, has also taken a toll. While home prices have soared over the last five years, providing homeowners with record equity, income hasn’t increased at the same rate. The federal minimum wage is $7.25 per hour and has remained unchanged for over 16 years. This has caused a major imbalance for many households, who may find themselves struggling to keep pace with inflation, even as soaring home values have provided them with more money on paper.
The Downsides of Being House-Rich and Cash-Poor
If all of your wealth is tied up in your home, you have less available cash on hand to support other financial goals. Here’s a look at some of the disadvantages of being house-rich and cash-poor.
- Inability to handle emergency expenses. Without any money to put towards savings, you may not have any savings to cover emergencies. The less you have in savings, the harder time you’ll have covering unexpected bills and needs, like a car repair, an ER visit, or a large property tax bill.
- Less money for retirement. When you start making payments on your essentials, there’s less money that goes towards retirement. The less you put towards retirement, the longer you’ll have to work into your retirement years. AARP recently found that 20% of Americans 50 years of age and older don’t have any retirement savings at all.
- The need to work more hours or for a longer period of time. With less money for retirement savings, more Americans are working longer. CNBC reported that the number of employed Americans aged 65 and older has grown by more than 30% over the last decade.
And since wages aren’t budging, more people may have to work more jobs or longer hours to afford the basics. Self Financial estimates that 45% of Americans have a side hustle and of those, more than 34% are using the extra cash to cover basic costs. Adding another job or a few jobs, however, can limit family or personal time.
Common Ways to Tap Home Equity
One way to access cash if you’re house-rich and cash-poor is to tap into your home equity. Equity is what your property is worth after you subtract what you still owe on your home. Say you have a home worth $500,000, and you owe $400,000 on your mortgage. You have $100,000 in equity.
There are a variety of ways to access your home equity – from traditional loans to newer options that don’t require monthly payments.
Home equity loans
A home equity loan is a loan that lets you borrow some of the money — or equity — you’ve paid into your home. You’ll receive a lump sum, typically with a fixed interest rate, and you can repay it in monthly installments until the loan is paid in full.
Like your mortgage, your home is used as collateral to secure the loan. If you can’t make payments on your loan, you could face a lien on your home.
Home equity line of credit (HELOC)
A HELOC is similar to a loan, but rather than borrow a lump-sum amount, you get a line of credit. You’ll receive a revolving line of credit and use it just like a credit card. It typically comes with a variable interest rate, and you’ll only pay back what you borrow.
HELOCs typically come with a draw period, during which you have a set time to withdraw from the credit line — usually 10 years. After that, the repayment period begins, lasting around 20 years.
Like a home equity loan, your home serves as collateral. So failing to make payments could mean you lose your home.
Cash-out refinance
Rather than getting an additional loan or line of credit, a cash-out refinance replaces your current mortgage with a new, larger one. The larger amount includes the balance remaining on your mortgage, plus any cash you wish to withdraw.
When you start to make payments on your mortgage, it’ll include the new, larger amount, along with a new interest rate and repayment terms. So, if you secured a low interest rate a few years ago, you could end up with a higher interest rate now.
Reverse mortgage
This type of loan is specifically designed for Americans 62 years of age and older who have significant home equity. A reverse mortgage is a lot like a home equity loan, but you don’t make loan payments. Instead, borrowers take out what they need and the loan is repaid when they move out, sell the home or pass away.
It’s called a “reverse” mortgage because the borrower doesn’t end up making loan payments and instead, the lender pays the borrower. But keep in mind that interest accrues on the balance, and you’ll need to pay your outstanding balance and interest when you leave your home.
Home equity agreement (HEA)
An HEA allows homeowners to sell a portion of their home’s future value to an investor in exchange for upfront cash. This type of alternative financing option doesn’t have the same stringent requirements as home equity loans and similar options. Instead, they have lower credit score requirements and don’t charge monthly payments.
Not all HEAs are the same, but in most cases, you buy back your equity from your HEA provider when you sell your home or when your term expires – anywhere from 10 to 30 years. Some providers, like Unlock, allow homeowners to make partial payments during their term.
Is an HEA Right For You?
An HEA is a newer equity agreement between homeowners and investors rather than with banks and traditional lenders. Because of that, make sure you weigh the pros and cons first.
Pros
- Not available everywhere. Some companies only operate in limited areas or states. While Unlock operates in half of U.S. states, some folks might be missing out.
- Equity requirement. Most providers of HEAs require that you have at least 25% to 40% equity in your home.
- Appreciation uncertainty. It’s impossible to know how much, over what period of time, your home will appreciate, making it difficult to determine the amount you may need to pay to settle your agreement.
Cons
- Not available everywhere. Some companies only operate in limited areas or states. While Unlock operates in half of U.S. states, some folks might be missing out.
- Equity requirement. Most providers of HEAs require that you have at least 25% to 40% equity in your home.
- Appreciation uncertainty. It’s impossible to know how much, over what period of time, your home will appreciate, making it difficult to determine the amount you may need to pay to settle your agreement.
Next Steps: How to Free Up Cash Without More Monthly Debt
Tapping your home equity is a way to take advantage of the wealth you have in your home to improve your cash flow. While home equity loans or HELOCs offer access to your equity, they also add more monthly debt to your list of obligations. Continued high interest rates may also make a cash-out refinance less appealing – especially if you have a rate that is below 5%. A home equity agreement is one of the few options that doesn’t require monthly payments or the need to replace your current mortgage.
Conclusion
Becoming house-rich, cash-poor can hurt many homeowners who are trying to survive on what they have. In some cases, it may not be enough. Fortunately, there are ways to use your home equity to make up the difference.
With flexible tools like Unlock’s HEA, you can access the cash in your home without selling it, refinancing your mortgage or taking on another monthly payment. See how much you can access today.
