Today I received a mailing from Unison, which claims to be a "homeownership investment" company. Their sales pitch is that they grant a 0%-interest loan to homeowners in exchange for a partial equity stake. I'm not particularly interested in participating in this (even assuming it's legitimate), but I have a few questions about it anyway:
- Is it legitimate?
- What are the risks to the homeowner and to the investor? What happens in case of foreclosure, for example?
- What are the benefits to the homeowner?
- Who should participate in this sort of investment?
It's certainly an interesting investment mechanism (for both the homeowner and the underwriters of the loan) but I'm wondering what the real cost/benefit is, here.
The offer letter itself also seems very scammy to me; for example, it opens with:
Do you wish you could access the equity locked in your home? With uUnison, you can receive $[xxx] and use the funds for any purpose you choose with no monthly payments and no interest charges. Yes, you read that correctly. It's almost too good to betrue[sic].
Even if it's legitimate, I suspect the value would be based on a current appraisal or tax assessment, which is also much lower than the actual market rate in my particular housing market, so it seems like an easy win for them and a long-term loss for me no matter what.