What is Hometap and how does it work?

Hometap is a financial services company that provides homeowners with a novel way to access their home's equity without taking out a traditional loan or mortgage. Instead, Hometap invests in the property by giving the homeowner an upfront sum of money in exchange for a share of the future value of the home. This concept is known as a "home equity investment" or HEI. The homeowner gets cash that they can use for various purposes, such as home renovations, debt consolidation, or other significant expenses. There are no monthly payments; instead, when the homeowner decides to sell their home or settle the investment—typically within a 10-year term—they pay back Hometap's investment percentage from the proceeds of the sale at the home's current market value. If the property’s value increases, Hometap benefits from the appreciation; similarly, if the home value decreases, Hometap shares in the loss.