Question 1

How much future appreciation do I give up?

Accepted Answer

Typically 25-50% of appreciation above your original purchase price. The exact percentage depends on your initial LTV, credit profile, and lender. Rates vary by borrower profile and market conditions.

Question 2

Can I refinance out of this loan later?

Accepted Answer

Yes, but you'll owe the lender their appreciation share at payoff. Most loans calculate this based on current appraised value when you refi or sell.

Question 3

What happens if my home doesn't appreciate?

Accepted Answer

You keep the lower rate and payment without owing additional money. The lender takes the downside risk. You only share gains, not losses.

Question 4

Do these loans work for refinances?

Accepted Answer

Some lenders offer them for refinances, but most prefer purchase transactions. Refi programs exist but have tighter LTV limits, usually 70% maximum.

Question 5

How do lenders value my home at payoff?

Accepted Answer

Standard appraisal from their approved list. You can dispute if needed, but the process mirrors a typical refi appraisal with less flexibility.

Equity Appreciation Loans in East Palo Alto: Leverage Silicon Valley Growth