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Unlock review 2022: Tap into your home equity

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If you have been making regular mortgage payments, you’ve been building equity in your property. That equity can help you secure money for other big expenses like paying for college, eliminating debt and remodeling your home.

San Francisco-based Unlock Technologies is designed to help you access that cash. The company doesn’t offer home equity loans or home equity lines of credit (HELOCs), which use your home as collateral and come with monthly payments and finance charges. Instead, the company uses a home equity agreement that operates like an investment. You give the company a piece of equity in the property in exchange for getting the money today while Unlock gets to share in the profits of your property’s appreciation. It’s similar to the way a stockholder would share in the profits of a company’s rise in market value.

Unlock has been around since 2021, and it is accredited by the Better Business Bureau. Past customers give it high marks, too. The company has a 4.6 out of 5 — excellent — rating based on nearly 90 Trustpilot reviews. For now, those customers are limited to just 15 states. Unlock operates in Arizona, California, Colorado, Florida, Michigan, Minnesota, Nevada, New Jersey, North Carolina, Oregon, South Carolina, Tennessee, Utah, Virginia and Washington.

How Unlock works

Unlock pays you money today for the opportunity to get a piece of the proceeds of the sale of your home up to 10 years in the future. The company will offer anywhere between $30,000 and $500,000, depending on your property, finances and amount of equity.

A typical agreement might give you 10 percent of your home’s value in exchange for 16 percent of its future value. For example, if your home is worth $300,000 today, you might borrow $30,000. Eight years later, your home goes to contract for $400,000. When you close the deal, you would owe Unlock $64,000.

Homeowners have several choices on how to fulfill the agreement. They can sell the home at any time, or they can buy back the home equity incrementally or over time. When the agreement is settled, borrowers will pay back according to the original terms (for example, 10 for 16%).

To work with Unlock, you’ll need to create an account and submit a few pieces of information: your government-issued ID, proof of homeowner’s insurance and past mortgage statements. The preliminary approval process takes around 60 seconds. If the terms look good, you’ll need to spend another 5–10 minutes completing a full application. This starts the typically 30-day process that includes an appraisal and a home inspection. According to Unlock, the process can move as quickly as 10 days.

Who is a good fit to apply with Unlock?

If you need immediate access to money and have at least 20 percent equity built up in your home, Unlock might be a good match. The company requires a FICO score of just 500, so this can be a particularly good choice for someone with subpar credit who might struggle to get approved for a home equity loan or a HELOC.

For example, if you’re struggling to make minimum payments on a large chunk of high-interest credit card debt, Unlock can be a good solution. By eliminating your debt load today, you can avoid continuing to rack up pricey finance charges.

Unlock’s terms and fees

Unlock’s agreements all operate on a 10-year timeframe. Once you sign a contract, the company places a lien on your property. After a six-month period, if you want to, you can begin buying out the company’s stake in your home with partial payments or a lump sum. Once your contract expires at the 10-year mark, you’ll either need to buy Unlock out or sell your home.

Unlock does not have monthly payments or interest charges. You will, however, be responsible for a 3 percent origination fee and the expenses for appraising and inspecting your home. You’ll also be responsible for covering the costs of recording the transaction with the appropriate record-keepers. Those expenses vary based on the size and location of your home, but appraisals generally run between $300 and $450 with home inspections carrying a similar price tag. Notary and title costs can vary, but if you’re thinking about working with Unlock, get an upfront estimate of all the additional fees.

Pros and cons of an Unlock agreement

Getting a chunk of money soon without the need to make payments or owe additional interest is appealing, but there are upsides and downsides to “unlocking” that cash. Weigh the immediate benefits with the potential long-term consequences before signing on the dotted line.

Pros

  • No monthly payments
  • No finance charges
  • A minimum credit score of just 500 to qualify
  • No income requirement
  • Soft credit check, which does not impact your credit score

Cons

  • You won’t make as much money when you sell your home
  • Origination fee, plus other fees for appraisal, inspection and recording
  • Unlock is only available in 15 states

How Unlock compares to alternative home equity sharing companies

Unlock isn’t the only company that operates on an instant-cash-for-future-equity approach. Consider how it stacks up against these other names that have a similar business model.

Unlock Noah Unison
Minimum eligibility requirements Credit score of 500 Credit score of 580 Credit score of 620
Length of term 10 years 10 years 30 years
Settlement (amount you owe) based on A percentage of the final value of the home A percentage of the final value of the home A percentage of the difference between initial value and value at the end of the term
Fees Origination fee of 3% of the investment amount, plus appraisal inspection and recording fees $2,000 or 3% of the investment amount (whichever is higher), plus a range of other potential fees 3% of the investment amount, plus appraisal and settlement costs
Locations available Arizona
California
Colorado
Florida
Michigan
Minnesota
Nevada
New Jersey
North Carolina
Oregon
South Carolina
Tennessee
Utah
Virginia
Washington
California
Colorado
Massachusetts
New Jersey
New York
Oregon
Utah
Virginia
Washington
Washington, D.C.
Arizona
California
Colorado
Delaware
Florida
Illinois
Indiana
Kansas
Kentucky
Massachusetts
Michigan
Minnesota
Missouri
Nevada
New Jersey
New Mexico
New York
North Carolina
Ohio
Oregon
Pennsylvania
Rhode Island
South Carolina
Tennessee
Utah
Virginia
Washington
Washington D.C.
Wisconsin

The bottom line

If you need an instant influx of cash, Unlock is an easy solution that will not impact your monthly budget and won’t weigh you down with additional interest charges. The other big appeal of the company is its willingness to work with homeowners with credit scores as low as 500.

However, it’s important to understand what you’re giving up to get your money. One of the big perks of owning a home is the chance to build wealth so you reap the reward of an increase in value when you sell it. With Unlock, you could give up a big portion of your sale price. Plus, you could back yourself into a corner with the need to pay it back in 10 years. If you aren’t ready to move at that point and you don’t have the money to buy out the agreement, you could regret your decision.

Anytime you’re making a decision that involves your most valuable asset (your home), think carefully about how you plan to use the money and the implications for your long-term financial well-being.

Written by
David McMillin
Contributing writer
David McMillin is a contributing writer for Bankrate and covers topics like credit cards, mortgages, banking, taxes and travel. David's goal is to help readers figure out how to save more and stress less.
Edited by
Loans Editor, Former Insurance Editor