How to pay back your HEI: home sale

One of the biggest benefits of an HEI is the fact you don’t need to make any ongoing payments in return for the funds you need right now. Whether you’re upgrading your living situation to age in place or paying off high-interest debt so that you can build your credit, an HEI can help you get there without the added stress of monthly payments. 

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Once you’re ready, Point is here to support you in paying back your HEI. One of the most common ways to do this is by selling the home and using a portion of the proceeds to pay back Point. In fact, one out of every three homeowners with a Point HEI pays it back via a home sale. 

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If you’re ready to sell your home it can be a great way to pay back your HEI. The process of selling your home takes a few steps, so we’ll walk you through how it works. In most cases, paying back your HEI will be relatively quick and easy once you’ve sold your home. 

Paying back your HEI with a home sale: an overview

When you sell your home, it will be time to pay back your HEI with Point. Many people prefer this approach because you don’t need to worry about lining up alternate financing or draining your savings. You can simply use the sale proceeds to repay the HEI; no debt is needed. 

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When you prepare to sell your home, simply reach out to Point’s customer care team to begin the payoff process. After you find a buyer, Point will use your home’s sales price to determine its share of your home’s appreciation and generate a payoff amount. Send in your payment out of your home’s sale proceeds, and that’s it — your HEI is repaid. 

Pros and cons of selling your home to pay back your HEI

Pros 

• Easier way to pay back Point: Selling your home is a natural exit point for many homeowners with a Point HEI, especially if you’re ready to move on. You don’t need to worry about meeting strict income and credit requirements in order to take on more debt. 
• Cash out remaining home equity: If your home appreciates significantly, you could stand to gain a big windfall that you can use to help you fund the next chapter of your life after you pay Point back. 

Cons

• Difficulty in finding a new home: If you were previously living in the home, you’ll need to navigate moving to a new home on top of everything else. Even if you weren’t living in the home, you’ll need to re-home any furnishings or personal items that were inside of it.  
• Complex process to sell a home: There are many steps in selling a home, from getting it ready, finding a buyer, and closing the sale. It can take a long time, and you’ll need to budget for closing costs too. 
• Variable market conditions can affect payoff: It can take longer to sell your home during a buyer’s market. Changing markets affect your home’s sales price — and, ultimately, how much you and Point both receive from the home sale.

Is selling your home the best way to pay back your HEI?

Selling your home is a popular way to repay a Point HEI, but it’s not the only way. Before you reach out to a realtor, ask yourself a few questions first, because there may be a better option. 

Are you ready to move to a new home?

It’s a big step to sell your home to pay back your HEI. It may be a good choice if you’re ready to move on or if alternatives don’t work for you, but also consider everything that it entails. 

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First: do you have a compelling reason to move? Do you want to be closer to family, or to downsize to an easier-to-maintain home? Take a look at your budget to see what you can afford for your monthly housing expenses. Check your savings to see if you can afford to pay for moving expenses and closing costs. 

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It’s a good idea to check your credit reports and your credit score, too, so you know how likely you may be to qualify for new financing or housing opportunities. 

What are the market conditions like?

Research what the real estate market conditions are before you sell, and know how they stand compared with the norms. We can’t always plan our home sales for the right time, but even so, it can help you set your expectations. 

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If you’re selling your home during a buyer’s market, for example, it may be harder to find a good offer, and it could take longer to sell. Your home may not sell for as high of a price, meaning that both you and Point may not receive as much back from your home sale. 

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On the flip side, your home may sell quickly and fetch a high price during a seller’s market. That means you’ll send a larger payment to Point to pay back your HEI, but you’ll also receive a larger amount of cash. 

Have you considered your other options?

Don’t want to sell your home? You don’t necessarily have to. Here are a few other options people use to pay back their Point HEI:

• Re-Point
• Cash savings
• Home equity loan
• Reverse mortgage
• Cash-out refinance
• Home equity line of credit (HELOC)

Alternatively, if your Point HEI’s term isn’t yet up, you can also consider using savings or financing to move to a new home. You can then rent out your current home to earn passive income. Point charges a small rental premium if you choose this option.

Steps to pay back your HEI using a home sale

If you decide that selling your home is your best option to pay back Point, there are a few things you can do to smooth the process along. 

Step 1: Assess your home’s current market and home value

Point will email you a statement every quarter detailing your estimated home value and the payoff amount for your HEI. You can also reach out to Point’s customer care team at any time to get an updated payoff estimate. 

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You should interview realtors and discuss your sales options. Your agreement with Point requires you to work with a realtor when you sell your home, but there are perks for you as a seller as well. Working with a realtor offered a smoother home-selling experience for most sellers and fetched a final sales price 50% higher than homes sold by their owners, according to the National Association of Realtors.

Step 2: Prepare your home for sale

Have an honest discussion with your real estate agent about which, if any, repairs or upgrades you should work on to get your home ready for sale. At the very least, you’ll want to clean the home up for showings. 

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This is a good time to start packing and looking for your next home, if you don’t know where you’ll be moving next. Once you decide to sell, make sure you reach out to servcing@point.com.

Step 3: Price your home and set expectations

Set a starting point for your home’s sales price together with your realtor by comparing “comps” (comparable homes that have recently sold in your area). 

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It’s also a good time to have a frank discussion about how quickly it may sell given the current market conditions. That can help prepare you for how quickly you may need to act to complete all of the steps in selling your home. 

Step 4: Market and list your home

Discuss what, if any, marketing strategies you’ll use with your realtor. For example, you may consider hosting an open house, sharing the listing on social media, or hiring professional photographers and home stagers. 

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Your realtor will also list your home on your area’s Multiple Listing Service (MLS). This advertises your home for all local buyers to see, helping you fetch the best sales price. 

Step 5: Negotiate offers and close the sale

After your home is listed, your agent will work with you to arrange any showings and review any offers to buy your home. This often involves a fair bit of negotiation between you and the buyer. For example, buyers may request that you fix broken items or accept their offer contingent on them being able to successfully arrange financing. 

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Your realtor will help you negotiate the best offer and guide you through the closing process. You’ll also move into your new home during this period. 

Step 6: Share contract information with Point and pay off your HEI

Once you’ve sold your home, you will share your sales contract with the Point’s team. Point will send you a link to upload a copy of your sales contract securely, which it’ll use to calculate your final payoff amount.  

Conclusion

Selling your home is the simplest and most natural way that many people choose to pay Point back. Most people choose to go the traditional route and hire a realtor who can help ease the load in selling your home, although you’re also free to sell it yourself of course. 

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If your home sale is not an arm’s length transaction – such as if you decide to sell to a family member or friend directly – Point will order a home appraisal to get a fair estimate of your home’s value to generate your payoff amount. No matter how you decide to proceed with your home sale, Point is here to make your payoff as simple and easy as possible.