A home equity agreement gives you funds now in exchange for a share of what your home is worth later, settled when you sell or buy the agreement out. Credit and income requirements are lighter than a HELOC's, which is why people who were declined end up looking at one. What you eventually hand over depends on your home's value at settlement, and that can be considerably more than a second mortgage would have cost. I'm a Loan Officer with Saxton Mortgage and I'll put an agreement, a second lien and a cash-out side by side with your situation on them — including when the agreement is the worse deal.
Everyone in this category advertises how easy it is to qualify. Almost nobody shows you the settlement.
Three things decide whether an equity agreement is the right answer for you: how your home is likely to be valued at the start, what share of the future value you are giving up, and how long you expect to hold the property. Ask any provider for written repayment scenarios at several different future values before you sign. If they will not put those in front of you, that tells you something.
It is also worth knowing that this product is under active regulatory scrutiny. The Consumer Financial Protection Bureau published an issue spotlight on home equity contracts in January 2025, several states have recently brought them under their mortgage lending laws, and a state attorney general is currently litigating whether one provider's product is really a reverse mortgage. None of that makes the product wrong for you. It does mean it deserves a slower read than the two-minute application implies.
My own position is simple: if a second mortgage or a cash-out serves you better, I will tell you so, because that is the business I would rather have.
See where you stand
About two minutes. No credit pull, no obligation.
Most options here start around a 500 credit score, and some do not depend on tax returns at all. Availability of equity agreements varies by state — if yours is not one of them, I will say so and show you what is.
Awards earned by Saxton Mortgage, the lender behind your file.
They fail in different places. Which one fits depends on your credit, your documentation and how long you plan to stay.
A company gives you funds today. In exchange it takes a share of your home's value, recorded as a lien against the property, and settles when you sell, refinance it out, or reach the end of the term. What you hand back is calculated from the home's value at that point rather than from a fixed schedule.
Underwriting leans on the equity and the property rather than on credit score and documented income. Self-employed owners, commission earners and homeowners with a rough credit stretch behind them often fit here when a bank's overlay says no.
Ask for the settlement calculated at several different future home values, in writing, along with how the starting value is established and whether a discount is applied to it. A provider who supplies that readily is one worth talking to.
A fixed second lien or a line of credit leaves your existing first mortgage untouched, has a known cost written on the Loan Estimate before you commit, and does not take a share of your home's future value. It asks more of your credit and documentation in return. For many people it is the better deal, and it is the first thing I check.
If the obstacle is documentation rather than credit, a bank statement or asset-based loan may reach the same money through an ordinary mortgage. This is the part of my business I do most, and it often removes the need for an equity agreement entirely.
These products are not offered everywhere, and several states have recently brought them under their mortgage lending laws. I will tell you where yours stands rather than taking an application for something you cannot have.
Settlement usually happens by selling the home, but it can also be refinanced out with a mortgage if there is enough equity and the file supports it. If you are looking at a settlement figure and want another route, bring me the agreement and I will read it.
If you expect to stay long enough that a share of appreciation gets expensive, if a second lien is within reach, or if the funds are for something that will not survive the settlement — I would rather say that now than take the file.
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Saxton Mortgage, LLC holds lending licenses in 38 states under NMLS #1717191. I personally originate in thirteen of them: AL, AZ, CA, CT, FL, MD, MI, OR, PA, TN, TX, UT and VA.
Saxton is a Top 1% certified partner with United Wholesale Mortgage, the largest wholesale lender in the country — which affects pricing and turn times in ways a small independent shop cannot match.
I submit your file to multiple wholesale investors and bring the options back to you. A bank can only ever offer you the bank.
The institutional weight sits behind the loan. The relationship isn't outsourced — you work with me from the first call through closing, not a rotating queue.
Verify any of this yourself — I'd rather you checked than took my word for it.
As we were shopping around lenders, Mike was recommended by a realtor friend. We spoke to Mike and laid out our concerns and right away he made our worries feel at ease. All we did was ask if he could close on the date provided and he went to work. Mike definitely went above and beyond and he made sure to take care of his veterans. In the near future we would love to work with Mike again and would definitely recommend him to all our homebuyer friends.
Saxton Mortgage, LLC holds a 4.8-star average across 889 client reviews aggregated from Zillow and other sources. That rating reflects the company as a whole, across every loan officer.
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Providers generally present it as an investment in your home rather than as credit. Regulators increasingly disagree: the CFPB has argued these contracts are covered by the Truth in Lending Act, and Connecticut, Maryland and Maine now regulate them under their mortgage laws. What is not in dispute is that it is secured by your home and that you settle it later with money.
It depends on what your home is worth at settlement and on the share and starting value written into your agreement. That is genuinely unknown today, which is why you should ask for written scenarios at several future values rather than a single headline number.
In most cases yes — the agreement sits behind it, so a low first-mortgage rate stays where it is. The same is true of a second lien, which is why the two belong side by side rather than one being assumed.
Not necessarily. These products lean on equity more than on score, and separately I write non-QM loans that do the same. Tell me what happened and I will tell you which door is open.
Less than it does at a bank. An equity agreement may not need returns at all, and a bank statement loan reads deposits instead of returns. Two different routes to the same place, with different costs.
Not everywhere. Availability changes as states legislate, and I will check yours before either of us spends time on it. If it is not available, the second-lien and cash-out routes usually still are.
On mortgage files the wholesale lender usually pays my compensation, and on others it comes from loan proceeds at closing. Either way it is written on your Loan Estimate before you commit, and I am glad to walk you through it beforehand.
Not at this stage. The questionnaire uses your own estimate of your score and nothing touches your credit report until you ask me to proceed.
No, and nobody may tell you otherwise before reviewing your file. What I can commit to is a clear answer quickly, including a no.
So there are no surprises later.
I work remotely with clients across the states I'm licensed in. My office of record is Saxton Mortgage in San Diego — which in practice means you reach me directly rather than whoever happens to be at a branch desk.
I'm licensed in AL, AZ, CA, CT, FL, MD, MI, OR, PA, TN, TX, UT and VA. Kentucky is the notable exception — if your home sits on the Kentucky side of the Fort Campbell line I'll tell you at the outset and refer you to someone licensed there, at no cost.
That floor applies to the loans I write. Equity agreements start lower, which is one of the few places they genuinely win.
If I'm not the right fit, I'd rather say so on the first call than three weeks in. That has cost me business occasionally. It's still the right way to do this.
About two minutes, no credit pull, and no obligation. You'll get a clear answer either way.
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