Question 1

What's the difference between an HEI and a HELOC?

Accepted Answer

A HELOC (Home Equity Line of Credit) is a loan: you borrow money against your home's equity and pay it back with interest, typically over 10–20 years. An HEI (Home Equity Investment) is not a loan: a company gives you cash today in exchange for a share of your home's future appreciation. There's no monthly payment with an HEI; you settle when you sell, refinance, or hit the term end (usually 10–30 years).

Question 2

Which is cheaper?

Accepted Answer

It depends on home appreciation. If your home appreciates rapidly, an HEI is more expensive (you give up upside). If it appreciates slowly or stays flat, an HEI can be much cheaper than a HELOC (you owe nothing if value didn't grow). At average 4% annual appreciation over 10 years, an HEI typically costs 1.3–1.5x the cash you received. A HELOC at 8.5% APR costs ~1.6x including interest. The break-even is around 5–6% annual appreciation.

Question 3

What credit score do I need?

Accepted Answer

HELOCs typically require 680+ FICO, with the best rates at 740+. HEIs are far more flexible: Splitero accepts 500+, Hometap and Point accept 500–550+. If you can't qualify for a HELOC, an HEI may be your only equity-tap option.

Question 4

What if I can't afford the monthly payment on a HELOC?

Accepted Answer

That's the core HEI use case. HELOCs require monthly interest payments during the draw period (years 1–10) and full principal+interest after. If your cash flow doesn't support that, an HEI lets you tap equity without any monthly obligation. The tradeoff: you give up appreciation share. Common scenarios where HEI wins: retirees on fixed income, self-employed with variable income, recent layoff, planning to sell in 5–10 years anyway.

Question 5

Can I lose my home with an HEI?

Accepted Answer

Less likely than with a HELOC. HEIs don't require monthly payments, so there's no missed-payment foreclosure risk. The HEI provider has a lien on the property (recorded at closing) and gets paid back when you sell, refinance, or at end-of-term. If you can't settle at end-of-term, options include refinancing the lien into a traditional mortgage, selling the home, or extending the term. With a HELOC, missed payments can lead to foreclosure within 90–120 days.

Question 6

Are HEI providers regulated?

Accepted Answer

HEIs are regulated as financial products in every state where they operate, but regulation varies. State licensing is required in most states. Hometap, Point, Splitero, Unison, and Unlock are the established players (5+ years operating). Newer entrants exist but should be vetted carefully — look for state licensing, A+ BBB rating, and 5+ years of operation history.

Feature	HELOC	HEI
Monthly payment	Yes — interest during draw, P&I after	None
Term	10-yr draw + 20-yr repayment typical	10–30 years to settle
Rate / cost	8.0–9.5% APR (variable)	No interest; share of future appreciation
Credit score required	680+ minimum, 740+ for best rates	500+ (varies; Splitero is most flexible)
Income verification	Standard — 2 yrs W-2 or tax returns	Light — most providers don't require
Maximum cash	85% LTV minus mortgage balance	$30K–$500K depending on equity
Tax-deductible interest	Yes (if used for home improvements)	No interest, no deduction
Foreclosure risk	Yes — missed payments → foreclosure 90–120 days	No — no payments, no missed-payment foreclosure

HEI vs HELOC: Which Equity-Tap Tool Fits You (2026)

Quick answer: which one fits you

Side-by-side: HEI vs HELOC

The cost math: $100K cash, 10 years

When HEI is the right choice

When HELOC is the right choice

The 5 established HEI providers

The decision matrix

Methodology

Frequently asked questions