Newfi EquityChoice: Mortgage-Based Home Equity Agreement

4.1 _/5

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Home Equity Agreement

EquityChoice offers more consumer safeguards and potentially lower costs than many similar products because it’s a residential mortgage product
No monthly payments
Know your capped repayment amount at closing

Requires at least 50% home equity
65% maximum CLTV (and 16% maximum for EquityChoice) is lower than many similar products
Minimum credit score of 680 is higher than many home equity agreement providers
3% transaction fee
Only available in 19 states*

Newfi is available in Arizona, California, Colorado, Connecticut, Delaware, Georgia, Idaho, Kentucky, Louisiana, Maine, Michigan, Montana, North Carolina, New Jersey, New Mexico, Ohio, Oklahoma, Oregon, and South Carolina.

This Newfi review explores the EquityChoice home equity agreement, a unique financing option for homeowners looking to access their equity without taking on monthly payments.

Unlike traditional loans, EquityChoice is structured as a residential mortgage product, offering capped repayment terms and enhanced consumer protections. While it’s only available in select states, Newfi stands out for its transparency and safeguards, making it a strong contender for eligible homeowners with substantial equity. Read on for its pros and cons and whether it’s the right choice for your needs.

Table of Contents Skip to Section

How does Newfi work?
Who’s eligible for a Newfi home equity investment?
How do you repay Newfi?
How much does a Newfi mortgage cost?
Pros and cons of EquityChoice
Newfi alternatives
More about Newfi

How does Newfi work?

Newfi’s EquityChoice is a home equity agreement (HEA) designed as a residential mortgage product. It offers more consumer safeguards and potentially lower costs than traditional HEAs. With a minimum investment amount of $85,000, it’s best suited for homeowners with significant equity. Instead of monthly payments, you get a lump sum upfront in exchange for a share of your home’s future value.

Your repayment is capped and disclosed at closing, which provides clarity and predictability. This HEA has a 10-year term, at the end of which you can either repay the agreement in full or sell your home to fulfill the terms. However, Newfi requires at least 50% equity and a minimum credit score of 680 to qualify, making it better suited for homeowners with strong financial profiles.

HEA term	Details
Investment amounts	$85,000 – $500,000
Fees	3% transaction fee + third-party fees
Buyout options	Repay in full or sell
Term length	10 years
Funding time	3 weeks

Who’s eligible for a Newfi home equity investment?

To be eligible for EquityChoice by Newfi, you must meet the following qualifications.

Requirement	Details
Properties	Single-family homes and planned unit developments (must be the primary home)
State of residence	Available in AZ, CA, CO, CT, DE, GA, ID, KY, LA, ME, MI, MT, NC, NJ, NM, OH, OK, OR, and SC
Min. credit score	680
Home equity	At least 50%
Max DTI	45%
Max CLTV	65% (Max LTV for EquityChoice itself is 16%)

You can use the free EquityChoice calculator on the Newfi website to find out how much you may qualify for without any impact on your credit. Just fill in where you live, your estimated property value, your current mortgage amount, and your FICO score. If you check your eligibility and decide to proceed, you can fill out an online form to start the formal application process.

Newfi doesn’t recommend EquityChoice for the following:

New homeowners
Those with less than 50% equity in their home
Those who own their home free and clear
Those planning to sell or move within the next five years. Y
Short-term real estate investors (e.g., house flipper)

How do you repay a home equity investment from Newfi?

Repaying a Newfi EquityChoice home equity agreement works differently from traditional loans. Instead of making monthly payments, you’ll settle the loan at the end of your agreement term or when you sell your home.

You can repay the balance using proceeds from your home sale, savings, rental income, cash from refinancing, or other investment accounts. The amount owed depends on your home’s value at the time of repayment:

If your home value increases: You’ll repay the principal loan amount, interest, and a portion of the appreciation based on your agreement.
If your home value decreases: You’ll only repay the principal loan amount and interest, with no obligation to cover the lost value.

Newfi also allows for early repayment without any prepayment penalties, giving you the flexibility to settle the agreement when it’s most convenient for you.

How much does a Newfi mortgage cost?

The cost of a Newfi EquityChoice mortgage depends on several factors, including your loan-to-value ratio, upfront fees, and your home’s future value. The LTV you choose determines the portion of future home appreciation you’ll share with Newfi—the higher the LTV, the greater the share.

Here’s a breakdown of appreciation interest based on LTV:

5% LTV: Share 15% of future appreciation
10% LTV: Share 30% of future appreciation
15% LTV: Share 45% of future appreciation

In addition to the shared appreciation, you’ll incur costs such as:

Origination fee: 3% of the loan amount (can be financed into the loan)
Appraisal fee: Paid out-of-pocket
Property inspection fee: Paid out-of-pocket

Newfi applies a state-specific cap to the total repayment amount, ensuring transparency and predictability for homeowners.

Pros and cons of EquityChoice by Newfi

Before you move forward with EquityChoice, it’s smart to consider the benefits and drawbacks of this product, including:

Pros

Mortgage safeguards

Because EquityChoice is a residential mortgage product, more safeguards apply to it than many other home equity investment products.
No monthly payments

You won’t need to budget for repayments every month. Instead, you’ll owe a final payment when you sell your home or your term ends, whichever occurs first.
Use the funds for any expense

Once you get the cash, you can put it toward any expense you’d like. Whether your goal is to consolidate high-interest debt or remodel your kitchen, EquityChoice can help.
Competitive interest rates

You will owe interest that compounds on a monthly basis, but it’s at a below-market fixed rate. This can lead to substantial savings over time.
Know your capped repayment amount at closing

You can’t know exactly what you’ll owe at the end of the agreement, but Newfi discloses the maximum possible.

Cons

Requires 50% home equity

You’ll need at least 50% equity in your home to take advantage of EquityChoice. If you recently moved in or haven’t made much headway on repaying your mortgage, you might not qualify.
You won’t know the total cost until the end

Because the amount you owe depends on future appreciation or depreciation, budgeting for your final repayment in advance is difficult.
Risk of foreclosure

Just like other home equity products, including home equity loans and home equity lines of credit (HELOCs), a home equity sharing agreement is tied to your home. If you don’t repay it as agreed, Newfi can foreclose on your home.
Low maximum LTVs

At most, you can be approved for an investment that equals 65% CLTV—and just 16% LTV for the EquityChoice product.
Minimum credit score of 680 required

This is higher than several other home equity agreement companies, with minimum required credit scores as low as 500.
Transaction fees apply

Newfi assesses a 3% fee on the investment.
Limited availability

EquityChoice is only available in 19 states

Alternatives to Newfi

If you’re confident a home equity agreement is right for you but are unsure whether Newfi is the best fit, consider our highest-rated alternatives.

Hometap allows for a home improvement adjustment (so the company won’t share in the appreciation from home improvements you pay for), and you’ll pay no out-of-pocket costs.
Point allows for a term of up to 30 years, and its product is available in 24 states.
Unlock, like Hometap, permits a home improvement adjustment and charges no out-of-pocket costs. It also allows you to buy out its share in partial payments over the length of the term.

Best overall

500

4.8

Free Quote

Best for longer terms

500

4.6

Free Quote

Best for partial payments

500

4.5

Free Quote

Check your state eligibility with Newfi’s top competitors

State	Hometap	Unlock	Point
Alabama	❌	❌	❌
Alaska	❌	❌	❌
Arizona	✅	✅	✅
Arkansas	❌	❌	❌
California	✅	✅	✅
Colorado	❌	❌	✅
Connecticut	❌	❌	❌
Delaware	❌	❌	❌
Florida	✅	✅	✅
Georgia	❌	❌	❌
Hawaii	❌	❌	✅
Idaho	❌	❌	❌
Illinois	❌	❌	✅
Indiana	❌	❌	✅
Iowa	❌	❌	❌
Kansas	❌	❌	❌
Kentucky	❌	❌	❌
Louisiana	❌	❌	❌
Maine	❌	❌	❌
Maryland	❌	❌	✅
Massachusetts	❌	❌	✅
Michigan	✅	✅	✅
Minnesota	✅	❌	✅
Mississippi	❌	❌	❌
Missouri	❌	❌	✅
Montana	❌	❌	❌
Nebraska	❌	❌	❌
Nevada	✅	❌	❌
New Hampshire	❌	❌	❌
New Jersey	✅	✅	✅
New Mexico	❌	❌	❌
New York	✅	❌	✅
North Carolina	❌	✅	❌
North Dakota	❌	❌	❌
Ohio	✅	❌	✅
Oklahoma	❌	❌	❌
Oregon	✅	✅	✅
Pennsylvania	✅	✅	✅
Rhode Island	❌	❌	❌
South Carolina	✅	✅	✅
South Dakota	❌	❌	❌
Tennessee	❌	✅	✅
Texas	❌	❌	❌
Utah	✅	✅	✅
Vermont	❌	❌	❌
Virginia	✅	✅	✅
Washington	✅	✅	✅
West Virginia	❌	❌	❌
Wisconsin	❌	❌	❌
Wyoming	❌	❌	❌
Washington, D.C.	❌	❌	✅

If you’re unsure whether a home equity agreement is right for you, consider other home equity companies.

Does Newfi have any control over my home or its condition?

Newfi doesn’t have direct control over your home. When you apply for EquityChoice, an independent third-party appraiser will estimate your home value and come to an appraised value. This amount is reduced by about 5% to account for market volatility and appraisal variance.

Newfi gets a percentage of your home’s future value, but it’s up to you how you use the funds. According to Newfi, many customers use EquityChoice to invest in real estate, start a business, improve their homes, cover college, consolidate high-interest debt, or replace expensive credit lines.

You may continue to live in your home and take advantage of any homeowner tax benefits that might apply to you. As with any other home loan product, you must maintain your property and pay for property taxes and insurance.

How we rated Newfi

We designed LendEDU’s editorial rating system to help readers find companies that offer the best home equity agreements. Our system awards higher ratings to companies with affordable solutions, positive customer reviews, and online transparency of benefits and terms.

We compared Newfi Ave to several home equity agreement providers, using hundreds of data points from company websites, public disclosures, customer reviews, and direct communication with company representatives. We weighted, scored, and combined each factor to produce a final editorial rating. This rating is expressed on a scale from 1 to 5, with 5 being the highest possible score. Our take is represented in our rating, recapped below.

Product	Rating
NewFi EquityChoice home equity agreement	4.1/5