EasyKnock offers homeowners an innovative way to tap their equity that is distinct from the typical reverse mortgages and home equity lines of credit. Through its model, homeowners rent their homes from EasyKnock, which becomes the landlord as it buys the property.
New York-based EasyKnock, founded in 2016, says its mission is to help homeowners achieve financial freedom through an equity release program called Sell & Stay. The company describes Sell & Stay as an alternative method of releasing equity and the first of its kind in the U.S.
In this review:
Sell & Stay Review
The technical term for EasyKnock’s Sell & Stay product is a residential sale-leasebacks.
With the Sell & Stay product, EasyKnock buys your home and gives you the equity. As the seller, you keep living in your home but you pay monthly rent. At any time, you can buy your home back or move.
The first step of the process is completing an application. After that, a funding amount, a rental price, and a repurchase price are negotiated. Lease terms are also negotiated. EasyKnock completes the sale and lease agreements, and can close a deal in less than 21 days.
If you decide to repurchase your home, it’s for the agreed-upon repurchase price. If you move, your house is put on the market by EasyKnock. Once the house sells, you leave and receive what’s called the Sellout Value.
Basic Information: Rates, Terms, Fees, and Limits
- Credit Requirements: Unlike other lenders, EasyKnock doesn’t require a certain income or credit score to rent the property back to you.
- Fees: The annual rent fee is 9.5%.
- Cash Out Value: Ranges from $60,000 to $450,000.
- Required LTV Ratio: EasyKnock does require you to have a loan-to-value ratio (LTV) of 50% or less. You can calculate your LTV ratio by dividing your remaining mortgage amount by the total value of your home.
- Who It’s Good For: The company touts its product as an alternative for people who don’t qualify for HELOCs.
- Lease Lengths: EasyKnock offers 12-month lease terms with the option to renew for up to 5 years.
- Pricing: Homeowners can negotiate the sale price, the length of the lease, and the price of their rent.
Pros & Cons of Sell & Stay
- Lenient Eligibility Requirements: One of the main benefits of Sell & Stay from EasyKnock is that you may be eligible for it even if you aren’t eligible for similar products such as HELOCs or home equity loans since EasyKnock considers income and credit score less than traditional banks and lenders.
- Short Time to Close: EasyKnock says it takes 21 days or less to get you your money and only 13 days on average. Most lenders and banks take 40 days or more.
- Great Website: EasyKnock’s website makes it easy to understand the products offered and it is user-friendly and simple to navigate.
- Have to Pay Rent: The main downside of EasyKnock’s product is that you become a renter in the home that you previously owned.
- Costs of Borrowing: You may pay more to borrow with EasyKnock than with other products. To start, there is a rent fee of 9.5%. Also, if you decide to buy back the equity in the home, you must repurchase it for the amount sold plus 2.5% of the original sell value. This 2.5% fee accounts for appreciation in home value, which is disclosed before any sale takes place.
EasyKnock MoveAbility Review
If you want to sell your home quickly or if you hope to sell but stay put for a while until you find your new home, MoveAbility is the ideal option for you.
With MoveAbility, you can get cash for your home in under 21 days—and most people access their money in as little as 13 days. Then, when you’re ready to sell, EasyKnock helps you work with the realtor of your choice to list your home at full market value.
You do have to pay to rent your home if you opt to stay, but you’ll have flexibility to lease your house back for up to 18 months, so you won’t have to move quickly.
This can leave you time to build or buy your dream home, which can be especially beneficial if you don’t qualify for a bridge loan.
Basic Info: Rates, Fees, Terms & Limits
- Credit Requirements: None
- Fees: 1.5% of your home’s market value plus rental fees
- Cash-Out Value: 75%
- Who It’s Good For: People who want to sell their home quickly and rent it back
- Lease Lengths: Up to 18 months
Pros and Cons of MoveAbility
- Getting money out of your home is easy: You aren’t taking out a loan with EasyKnock, so you don’t have to meet typical qualification requirements necessary for a cash-out refinance loan or other home equity products.
- Your debt-to-income ratio and credit score also don’t matter: So you can access the equity in your home even if you aren’t an ideal borrower.
- Funds can be accessed quickly: It normally takes a long time to sell your home. But you don’t have to worry about this with EasyKnock. Most people get their money in around 13 days, although it could take as long as 21 days to get to closing.
- You can give up the responsibilities of homeownership without moving right away: Since you can rent your home back for up to 18 months, you don’t have to leave your home when you sell to EasyKnock. And since you’ll no longer be an owner, you don’t have to worry about all the costs of homeownership, such as property taxes and insurance.
- You no longer own your home: With a home equity loan or refinance loan, you still retain ownership of your home and can benefit from property appreciation.
- You must begin paying rent: While you were previously an owner and building equity, you’re now a tenant. If you want to stay put in your home and rent, the money you pay each month goes to your landlord.
- Borrowing can be expensive: You have to pay rent for your home and you have to pay a fee to EasyKnock equal to 1.5% of your home’s value.
How Home Equity Works
Home equity is the value of your home that you fully own and cannot be claimed by a lender. It is calculated by subtracting any outstanding loan balances from the home’s market value. If the property value of a home increases or if the outstanding loan balances are reduced, then the home equity increases.
Home equity is an asset. If you have equity and you sell your home, you can use the equity toward buying a new one. Of course, you could also borrow against your home’s equity through a reverse mortgage or line of credit.
Using a loan to tap your home equity does come with risks. In these situations, your home is your collateral, and if you can’t repay your loan, you could lose your home.
EasyKnock’s Sell & Stay program is an interesting alternative for people who want to tap into the liquidity of their home equity. It provides fewer risks compared to traditional options like a reverse mortgage. However, it does come at a cost and it might not be the right option for everyone, so consider the fine print.3.83 EasyKnock