Guide
HELOC vs. home equity investment: which one costs you less
A HELOC is usually cheaper if you can carry a payment and your credit qualifies. A home equity investment costs more later and asks for no monthly payment.
A home equity line of credit (HELOC) is a second loan against your house. You pay interest, usually on a variable rate, and you keep the full future gain in the home.
A home equity investment (sometimes called a shared-appreciation agreement) gives you cash now with no monthly payment. You repay later by sharing a portion of the home's future value when you sell or buy the investor out.
If your credit is roughly 660 or better and you can carry a payment, a HELOC is typically the lower-cost path. If a monthly payment is the problem, or lenders are likely to decline you, the investment product is the one that still has a door open.
Neither option is free. One costs you cash every month. The other costs you a share of appreciation later. The right one is the one that matches the trade-off you can live with.