Home equity investment

Mechanics

An investor appraises or models the house and pays a lump sum, often framed as 10–25% of value. You grant a contractual share of the change in value and a lien is recorded. You keep title and the right to live there. There is no monthly payment and no accruing interest. The contract ends at a set term — commonly 10 to 30 years — or earlier at sale, refinance, or buyout.

Settlement is built on value change, not on a rate. Investor payout starts from the advance plus the contracted share of appreciation. Processing fees, often up to about 3–4% with a minimum, come out of the advance. If the house runs up, the settlement can cost more than interest would have. If it does not, the settlement is smaller.