Thinking about upgrading your kitchen, remodeling a bathroom, or making your home more energy efficient? Home renovations can add comfort, boost property value, and increase long-term satisfaction with your space — but they often come with a high price tag.
To finance renovations, many homeowners turn to what are broadly called home improvement loans. But there’s more than one way to pay for home upgrades! If you have equity in your home, a more innovative option could give you greater flexibility and fewer monthly obligations.
In this article, we’ll compare typical renovation financing methods to our Equity Sharing Home Loan (ESHL) – a unique approach designed to reduce monthly costs and align more closely with your financial success. We’ll also highlight one important benefit for ESHL customers: the Capital Improvement Adjustment, which helps ensure you reap the rewards of value-boosting upgrades.
First, What Is a Home Improvement Loan?
A “home improvement loan” isn’t one single product. It’s an umbrella term covering various methods of borrowing money to fund renovations. Most of these fall into one of four categories:
Home Equity Loan – A lump sum loan secured by your home’s value. Fixed rates, fixed payments.
HELOC – A revolving line of credit you can draw from as needed. Flexible, but often comes with variable interest rates.
Cash-Out Refinance – You replace your mortgage with a larger one, pocketing the difference. Can work well if current mortgage rates are lower than what you locked in.
Personal Loan – An unsecured loan based on your credit, not your home. Fast funding, but often comes with higher interest rates.
Each of these loans typically adds a new monthly payment, or increases your existing one — which may not be ideal if you’re already feeling the squeeze.
Meet the Equity Sharing Home Loan (ESHL)
Unison’s Equity Sharing Home Loan is a newer kind of loan that helps homeowners access their equity with lower monthly payments than traditional options.
Instead of charging full interest rates, Unison is able to provide a more affordable loan in exchange for sharing in your home’s future change in value, so we’re aligned to win – together. It’s a partnership model designed to offer maximum flexibility and keep your cash flow manageable, while keeping your goals front and center.
Why This Matters for Renovations
Home upgrades often increase your home’s value, but in traditional financing models, you don’t directly benefit from that until you sell or refinance. With our equity sharing home loan, that dynamic is a little different, thanks to a unique feature:
💡 The Capital Improvement Adjustment
We believe that when you invest in meaningful improvements to your home, you should benefit from the added value.
That’s why the ESHL includes a Capital Improvement Adjustment. If you make eligible renovations that increase your home’s appraised value (like a kitchen remodel, a new roof, or adding a bedroom), Unison adjusts the calculation of your home’s value at the end of the loan term, giving you full credit for the increase caused by your upgrades.
To qualify:
Use licensed contractors
Document the project thoroughly (keep contracts, receipts, before/after photos)
Renovations must be completed after the first three years of your loan
An independent appraiser determines how much value was added
Not all projects add major value – but if yours do, the Capital Improvement Adjustment ensures you’re the one who benefits.
Which Financing Method Is Right for You?
Choosing between traditional home improvement loans and Unison’s ESHL depends on your situation:
If you have strong credit, low debt, and prefer traditional repayment terms, a home equity loan or HELOC could make sense.
If you’re looking to minimize monthly payments, and you’re open to a shared-value model, ESHL offers flexibility and breathing room.
If your goal is to increase your home’s value through renovations, and you want to reap the benefits of that investment, the ESHL’s Capital Improvement Adjustment gives you a unique advantage.
Final Thoughts
Home renovations are a major investment – and how you pay for them can shape your financial future. Traditional home improvement loans are widely used, but they’re not your only option.
Unison’s Equity Sharing Home Loan offers a compelling alternative: lower monthly payments today, a partnership mindset, and a structure that rewards you for investing in your home. Add in the Capital Improvement Adjustment, and you get a financing option that truly works with you, not against you.
Want to see how an Equity Sharing Home Loan could help fund your next renovation?
FAQs
Q: What is a home improvement loan? A home improvement loan is a general term for financing used to pay for home upgrades or renovations. It includes home equity loans, HELOCs, personal loans, and more.
Q: What is an Equity Sharing Home Loan? An Equity Sharing Home Loan (ESHL) lets you tap into your home equity with lower and more flexible monthly payments, in exchange for sharing future home appreciation.
Q: How is ESHL different from a traditional home improvement loan? Unlike traditional loans that require monthly principal and interest payments, ESHL typically offers significantly lower payments, more flexible repayment terms, and helpful features like the Capital Improvement Adjustment.
Q: What is the Capital Improvement Adjustment from Unison? It’s a feature that ensures you receive the added value of qualifying home improvements. If renovations increase your home’s value, Unison adjusts its share accordingly – giving you the benefit.
Q: Is ESHL a good way to finance renovations? It can be, especially if you have home equity and want to minimize monthly costs while still benefiting from your upgrades.
Disclaimer: This content is for informational and educational purposes only and does not constitute financial, legal, or lending advice. Loan terms and availability vary by lender and state. Consult a qualified financial professional or lender for personalized guidance tailored to your situation.
Unison Mortgage Corp NMLS ID 2574289
About the Author
Unison
We're the pioneers of equity sharing, offering innovative ways for you to gain access to the equity in your home. For more than a decade, we have helped over 12,000 homeowners to pursue their financial goals, from home renovations to debt consolidation, retirement savings, and more.
