Unison home equity sharing agreements are best-suited to long-term use cases, allowing you to make your house a home, create lifelong memories, and accrue a healthy appreciation in your home’s value.
Once you’ve partnered with Unison and funded your goals, it’s time to get comfortable. Let’s break down some key milestones and important elements of the agreement to keep in mind.
Because a Unison agreement is intended for long-term situations, several perks of partnering with Unison will kick in after a few years have passed.
You’ll become eligible to apply for a Remodeling Adjustment after three years have passed, a major benefit that allows you to keep the increase in home value that results from any home improvements you make while partnering with Unison. However, it cannot be applied if you sell your home before three years have passed, and it is based on how much value was added to your home - not the costs of the projects.
You are always allowed to sell at any time since your home belongs to you, and you alone. If you decide to sell your home before the fifth anniversary of our partnership, then Unison will not share in any decline in the value of your home. This means that the Ending Agreed Value for your property will be at least equal to the Original Appraised Property Value, even if your property value has decreased since the start of your agreement. Thus, at a minimum, you’ll have to pay the original investment (together with any amounts attributed to the Risk Adjustment).
The 5-Year Milestone
Once our partnership has reached five years, you unlock a significant amount of flexibility. Once your restriction period is up, we’ll share in any gain or loss in value if you do decide to sell your home. You are also able to buy Unison out at any time without selling your home, but Unison will not share in any decrease of value. And there’s no need to change anything if you’re happy at home! You and your family can keep the good times rolling, allowing your home to increase in value over time. To ensure we both win, there are a few straightforward rules to keep in mind:
- Keep your home as your primary residence.
- Keep your home in good repair.
- Maintain proper insurance.
- Keep payments current.
- Allow aerial photography of your home.
- Keep us informed of any major changes.
Refinancing & Maximum Authorized Debt
While working with Unison, it’s possible you’ll decide to pursue a secondary home loan or refinance your existing mortgage. In this case, your mortgage and new secondary home loan combined can’t exceed your Maximum Authorized Debt Limit — a limit on the total amount of debt secured by your house.
There are, however, certain types of loans that we typically don’t allow — reverse mortgages, interest-only loans, shared appreciation loans, or any loan with a negative amortization feature. Also, if your home has declined in value since your agreement with us, we may not be able to approve any cash out loans that are above your current mortgage amount.
If you plan on refinancing your home, you should consider doing so before entering an agreement with Unison. Some lenders will decline to provide new loans to you if you have received subordinate financing from Unison.