All good things must come to an end. Your HEI will come due when you reach the end of its term length, although most people choose to pay off their HEI long before that.
The good news is the process is smooth and streamlined; unlike managing dozens or even hundreds of monthly payments as you would with a loan, you’ll only have one to make. Here’s what happens at each stage in the process so you know exactly what to expect.
Kick-starting the payoff process
When you’re ready, the first step is to reach out to Point’s customer service team and let them know your intentions to pay back your HEI. The easiest way to do this is via email at email@example.com. Let the servicing department know how you’ll be paying back your HEI — such as by selling your home, paying in cash, or another method — and they’ll be able to explain how the process works for your specific situation.
If you’re selling your home, your title or escrow company can connect with Point to clear the title for the buyer. The title or escrow company will need to send in the executed purchase contract and a third-party authorization form via email to the same address, firstname.lastname@example.org.
You’ll need to repay the funds you borrowed initially, plus a percentage of your home’s appreciation. In order to figure out how much your home has appreciated in value (or, in some cases, depreciated), Point will need to know your home’s value as it stands right now.
Calculating your home value
In order to calculate how much equity appreciation your home has experienced, Point will need to compare two numbers: your Appreciation Starting Value when you took out your HEI and your home’s current value. The difference is the amount of equity appreciation your home has seen, and Point charges a percentage of this amount as its payment.
Point works with RoundPoint, a servicing firm, to handle repayment. Once your home’s appraisal or home sales price is accepted, RoundPoint will send you a final payoff demand statement within two to three business days. To learn more about how Point calculates your final payment amount, you can reference Schedule 2 of your Option Purchase Agreement.
Here is how Point will calculate your current home value, depending on how you plan to repay your HEI:
Selling your home: Using the sales price
In most cases, Point can use your home’s sales price as its current value. It is, after all, the value that someone else was willing to pay for your home.
Once you find a buyer for your home, you (or your title or escrow company) will need to submit a copy of the signed purchase contract to Point via email. This document may also be called a sales contract or a purchase agreement. Point will check everything over to make sure it’s an arms-length transaction, meaning you’re not selling it at a discount to a friend or relative, for example.
You can still sell your property in a non-arm’s length deal if you wish, however, Point will order a full appraisal of your home to determine your payoff amount rather than using the sales price. This appraisal process can take up to 30 days to complete.
If Point determines that it is a regular arms-length transaction, you should receive a payoff demand letter within two to three business days. This will list the final payment amount needed to pay off your HEI in full.
Using another payoff method: Getting an appraisal
Many people choose to keep their home and opt for another payoff method instead. You have many options to pay back your HEI, including using a:
- HELOC/home equity loan
- Cash savings
- Reverse mortgage
- Cash-out refinance
- Re-Point HEI refinance
- Sale of home
You won’t have a home sales price in this case, so Point will order an automated valuation model (AVM) appraisal, which can be done remotely. It’s similar to what you see listed on websites like Zillow and Redfin, although unlike these popular real estate websites, Point’s AVM’s are designed to be lender grade and used for underwriting purposes.
Point will review the AVM for accuracy and issue your payoff demand letter within two to three business days. In the event the AVM is ineligible, Point may order a more in-depth appraisal and add this cost to your final payment amount. You also have the right to submit your own appraisal for consideration within 60 days if you’re not happy with the results from Point’s appraisal methods.
Making the payment
In addition to sending out the payoff demand statement, RoundPoint will also process your payment. RoundPoint will include instructions on how to make your HEI payment in this letter, which you can do via the following methods:
- Money order
- Wire transfer
- Certified funds
- Cashier’s check
- Attorney’s trust check
Once you make the payment, RoundPoint will send you a receipt of confirmation so you know your payment was safely received and acknowledged.
Releasing the lien
Once RoundPoint receives your full HEI payment, it’ll start working on releasing the lien that was placed on your home when you first took out your HEI. This process isn’t standardized and varies by county, so the timing can vary. Point and RoundPoint will both work diligently to address any hangups that may occur, but the process is generally a quick and smooth one.
You’ll pay off your HEI with a single payment, as outlined in your payoff demand statement. However, in the rare case that your payment doesn’t cover the full amount or if RoundPoint doesn’t receive the funds by the deadline specified, RoundPoint will notify you. You can also reach out to Point’s customer service team at any time for additional support.
Once your county’s recording department removes the lien, your HEI is complete. RoundPoint and Point will send you a confirmation of agreement termination to thank you for your business and notify you that your agreement is now satisfied.
Many homeowners prefer to work with Point because an HEI is a simple way to receive funds for the things you need, especially since you don’t have to manage monthly payments. That simplicity is also carried through when you pay off your HEI: you’ll only have one payment to make, and you’ll be able to do it at a convenient time for you during the term of your contract.
Aside from checking a few things, such as your home’s appraised value, the schedule of fees, and the lien release — there’s not really anything else that needs to be done on your end. Point and its servicing partner, RoundPoint, will take care of everything from there.