Splitero Home Equity Review

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Home Equity Investment

• Receive up to $500,000 in cash
• Remain the owner and continue living in your home
• No monthly payments
• No minimum credit score or income requirements

• Only available in select areas of California, Colorado, Oregon, Utah, and Washington

About Splitero

Founded in 2021, Splitero aims to redefine how homeowners tap into their equity without accumulating debt. The company operates on a home equity investment model, giving you upfront access to your home’s equity. In return, you share a portion of your home’s future value with Splitero.

The service is ideal for homeowners who don’t want the burden of monthly payments or added interest. It can also be a fit for those who may not have the credit score to qualify for traditional home equity loans or lines of credit (HELOCs). If you’re eyeing a home remodel, debt consolidation, or an investment opportunity, Splitero offers a debt-free alternative.

How does Splitero work?

Splitero offers a way to tap into your home’s equity without taking out a loan or accumulating debt. You get a lump sum upfront, and in return, Splitero acquires a share of your property’s future value. When you sell the home or reach the end of the term, you settle up with Splitero based on that agreed-upon share.

Here are the key terms to know about a Splitero home equity investment:

• Investment amounts: Max investment is 30% of your home’s value, up to $500,000. This allows you the liquidity you need without selling your home.
• Term length: 30 years.
• Repayment options: Repurchase your option from Splitero anytime within the 30-year term, typically through a refinance, home sale, or cash buyout. No penalty for early repurchasing.
• Unique features: No credit score or income requirement for eligibility. 

Who’s eligible for a Splitero home equity investment?

Eligibility for a Splitero home equity investment is more inclusive than you might find in more traditional home equity products. It removes traditional barriers including credit score and income requirements. 

However, this inclusivity comes with its own set of risks for homeowners. Unlike a traditional loan, where the terms are fixed, a home equity investment fluctuates with the market value of the property. This could mean higher repayment in the future if the property appreciates.

If you don’t have the funds to settle at the end of your term, you must sell your house. Here is a look at the eligibility details.

Requirement	Details
Properties	Single-family, condos, townhomes, and 2 to 4 unit residences valued between $150,000 and $5,000,000.
State of residence	California, Colorado, Oregon, Utah, and Washington
Maximum loan-to-value	80%
Maximum debt-to-income	Not disclosed, but cannot have more than 2 remaining liens on the property
Minimum credit score	No minimum, but credit score affects pricing
Minimum income	None

How do you repay a home equity investment from Splitero?

Understanding the repayment structure of a home equity investment with Splitero is crucial. First off, the term length for these investments is 30 years. Unlike some competitors—including Unlock, which allows for partial payments—Splitero requires a one-time lump sum payment.

Anytime within or at the end of your 30-year term, you have three paths to repayment:

• Refinance your home
• Sell your property
• Cash buyout

There’s no penalty for repurchasing your option before the term ends, which means you have the flexibility to exit the investment at a time that suits your financial situation.

Splitero doesn’t offer customized terms. Everyone gets the same 30-year term length, which affects the overall cost at the end.

With a fixed 30-year term, if your property appreciates, you could end up paying more than you received. That said, it’s a calculated risk, one that requires weighing your current financial needs against future financial obligations.

How much does Splitero cost?

Splitero’s cost structure differs from traditional loans. 

In terms of fees, here’s what you can expect:

• 4.99% origination fee
• An appraisal cost of $200
• Escrow, title, and closing fees totaling around $800

These aren’t out-of-pocket but are folded into the home equity agreement and subtracted from the amount you get.

Splitero determines your cost using a mix of your home’s value, the equity you hold, and the share of the home’s future appreciation you and Splitero agree upon in the contract. The percentage of your home’s value Splitero receives differs for each borrower based on these factors.

How is the final payment calculated?

Splitero uses a third party to evaluate your home—once at the start to determine an appraised value and again when you’re ready to repay the investment. Your final payment depends on this end-point valuation, as well as the percentage of appreciation you agreed to share.

To calculate the amount you’ll owe Splitero, the company considers several terms:

• Starting point: Determined as a discounted percentage of your home’s appraised value.
• Ending point: The value of your home when you’re ready to repurchase your option.
• Splitero’s split: The percentage of the home’s future appreciation you’ll share with Splitero.

A safety cap of 19.99% ensures you don’t share excessive appreciation, and your repayment could be less if your home’s value decreases.

What is the effective APR?

You can use Splitero’s online calculator to understand your home’s current and future value, how much you could qualify for, as well as how much Splitero’s split might be at the end of your term.

When you do this, you’ll notice Splitero lists an effective APR that decreases over time. It can be used to assess the long-term “cost” of your investment, but it differs from loan interest rates. In essence, it’s a yardstick for long-term costs.

Source: Splitero

Source: Splitero

Example:

• You own a home with an initial value of $700,000 and a starting point of $525,000. 
• You receive $91,000 from a Splitero home equity investment, with a Splitero split percentage of 39%. 
• Assuming your home appreciates the average of 3% per year, here is how much you would owe Splitero when repaying at varying points in your term:

Term	Future home value	Effective APR	Amount paid (Splitero’s split)
5-year	$813,132	18.08%	$203,371
15-year	$1,097,202	8.74%	$314,159
30-year	$1,719,790	6.26%	$556,968

You can see how the longer the term, the lower the effective APR. However, consider the difference between your borrowed amount (less than $100,000) and the amount paid—more than five times that if you pay in 30 years.

Note that this example also assumes an appraisal cost of $200, escrow, title, and closing fees of $800, and a 4.99% origination fee. Your Splitero split percentage could also vary.

Meanwhile, here is what this example could look like if your home depreciates 2% each year. 

Term	Future home value	Effective APR	Splitero’s split
5-year	$633,333	8.81%	$133,250
15-year	$518,443	0.22%	$88,443
30-year	$383,976	-2.58%	$36,001

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

Splitero doesn’t get a say in how you handle your property. Here is what you should know:

What control does Splitero have over home maintenance and renovations?

Splitero provides cash in exchange for a share of your home’s future value, but it does not retain control over how you maintain or upgrade your home. You’re free to undertake any home projects, whether that’s a new coat of paint or a full-on kitchen renovation, without needing to seek permission.

You can use the cash you receive from Splitero however you wish, including for home renovations. Further, Splitero does not mandate regular inspections during the term of the agreement.

Does renovating the home affect the repayment amount?

When you pump money into significant home upgrades, that investment isn’t lost. Your home’s value increases, but so does the amount you must pay Splitero at the end. Your slice of the home’s future value will also reflect these improvements.

Competitors Unlock and Hometap offer home renovation adjustment options. These adjustments allow you to keep a greater portion of the increased home value resulting from improvements. From what we could tell, Splitero does not offer an option like this.

Are you required to maintain the home in a certain condition?

Splitero does not impose any maintenance requirements. However, remember that keeping your home in good shape could affect its future value, and hence the amount you owe when the term ends.

Any inspections during the term?

Splitero trusts you to keep your home in good condition but does not schedule any inspections during the term. A third-party appraisal determines the value of your home when you’re ready to exit the agreement.

By understanding these aspects, you have a clearer picture of how Splitero fits into your homeownership journey. The company provides financial flexibility without dictating how you should manage your home.

Pros and cons of Splitero

Splitero comes with advantages and shortcomings. A closer examination can help you decide whether it’s the right choice for your situation.

Pros

• No income or credit requirements

  A useful feature for those who may struggle with traditional lending criteria.

• 30-year term

  The long repayment period offers flexibility, with no prepayment penalty attached.

• Homeowner advisor

  An advisor is assigned to assist you through the process.

Cons

• Lump-sum payment

  Unlike Unlock, Splitero requires payment in one go, limiting your options.

• No early payoff benefits

  You won’t find incentives for repaying your investment early, unlike competitor Hometap.

• Low customer ratings

  Negative reviews and low ratings indicate potential issues in funding, appraisal, and processing time.

Splitero offers a level of flexibility with no income or credit requirements and a long 30-year term, but the service comes with notable drawbacks. The lack of early payoff incentives and the necessity of a lump-sum payment can be limiting. 

Competitors Hometap and Unlock may offer more flexible conditions and better customer satisfaction, and both are taking new applications.

Is Splitero a reputable lender?

Source	Customer rating	Number of reviews
Trustpilot	3.8 out of 5	14
Better Business Bureau	2.33 out of 5	3
Google	2.9 out of 5	7

Ratings collected on February 29, 2024.

Splitero’s customer ratings display a mixed bag of experiences. The company has secured an A rating and accreditation from the Better Business Bureau, lending it credibility. Trustpilot, a reputable platform for consumer feedback, features one-star complaints and five-star praises. 

The common issues cited involve long processing times and a lack of communication, specifically regarding application denials. However, several reviews also mention good customer service. The Better Business Bureau ratings also cite slow funding and low equity calculations but include a positive story of timely financial aid.

Trustpilot and the Better Business Bureau are recognized platforms for consumer reviews. Both entities have guidelines for authentic and unbiased feedback. Google Reviews, although limited in number, offer straightforward user perspectives. These sources provide a comprehensive view of customer experiences with Splitero.

Does Splitero have a customer service team?

Splitero’s customer service team operates out of San Diego, California. The team assists with inquiries ranging from application procedures to the details of the repayment process. While customer reviews on their responsiveness vary, the team offers multiple channels for reaching out.

Ways to contact Splitero:

• Email: [email protected]
• Mailing Address: 8910 University Center Ln., Suite 400, San Diego, CA 92122
• Social media: X (formerly Twitter), Facebook, Instagram, LinkedIn

How to apply for a Splitero home equity investment

Compared to other companies, Splitero’s application process appears thorough but standard. One advantage is the ability to prequalify without affecting your credit score. 

However, a full application triggers a hard credit inquiry, which could affect your credit.

Here are the steps to apply:

1. Check eligibility: Verify whether you prequalify for an investment up to $500,000. This usually takes one to two business days.
2. Complete application: Answer questions about yourself, your home, and the use of funds. Submit a government-issued ID, mortgage statements, and possibly other documents.
3. Wait for offer: After preapproval, Splitero assesses your home’s value and other conditions. A final approval follows underwriting.
4. Receive funds: Upon approval, you’ll receive a wire transfer of the agreed amount.
5. Repurchase option: You have the flexibility to repurchase your option within the next 30 years via a refinance, home sale, or cash buyout.

Note: Splitero is not accepting new applications due to high demand as of August 2023. You can still prequalify and join the waitlist.

What if I’m denied a home equity investment from Splitero?

If you’re turned down by Splitero, it should inform you about the reason for the denial, which can be a useful insight for future applications. The company doesn’t specify a waiting period for reapplying, but knowing why you were turned away can help you tackle those issues before giving it another go.

• Low home equity: If you find your home equity isn’t cutting it, consider waiting for a more favorable market or work on reducing your mortgage balance.
• Poor credit score: Take measures to improve your credit, settling debts and making sure all payments are on time.
• Incomplete or incorrect information: Double-check your application, and correct any errors before reapplying.

Denied applicants shouldn’t be discouraged. Tackling these issues could make your next application successful. 

Meanwhile, you may also want to explore our best home equity investments page and our list of home equity companies to consider other options that might be a better fit.

How do other home equity products compare to Splitero?

Splitero stands apart in a sea of home equity options, including home equity lines of credit (HELOCs), home equity loans, and reverse mortgages. 

Unlike traditional equity products, Splitero doesn’t require monthly payments or charge interest. Instead, it takes a share of your home’s future value. That could make it suitable for those who aren’t looking to add another monthly bill to their budget.

HELOCs and home equity loans, on the other hand, require monthly payments and come with interest rates. Reverse mortgages are closer to Splitero’s model but are generally restricted to homeowners 62 and older and can come with a host of fees. 

Overall, Splitero offers a unique blend of flexibility and commitment-free financial backing that might be the right choice depending on your circumstances.

FAQs

How long does it take to receive funds from Splitero?

Once approved, receiving funds from Splitero typically takes a few business days. The duration depends on how quickly you complete your application and the underwriting process.

Do you need to tell Splitero what the funds are used for?

Splitero asks what you plan to use the funds for during the application process. The use of funds won’t necessarily affect your eligibility, but knowing your plans helps Splitero offer a tailored home equity investment that fits your financial needs.

Are there any tax implications for using Splitero?

With Splitero, there aren’t immediate tax implications when you receive the funds because it’s an investment, not a loan. However, there may be tax implications when you repurchase your home equity investment or sell your home. Consult a tax advisor for personalized guidance on how Splitero might affect your tax situation.

What happens if my home is damaged or destroyed during the term?

If your home is damaged or destroyed during the term of your agreement with Splitero, you’re responsible for repurchasing the home equity investment. Homeowners are required to maintain adequate home insurance to cover such instances. Review your contract for the specific terms related to property damage.

What happens if I die or become permanently disabled?

In the unfortunate event that you die or become permanently disabled, the responsibility to repay Splitero’s investment usually falls to your estate or spouse, if applicable. Make sure to consult your agreement for specific details and consult an estate planning attorney for personalized advice.

How we rated Splitero

We designed LendEDU’s editorial rating system to help consumers identify companies that offer the best financial products. Our experts spend hours researching these companies each year to ensure our ratings are fresh and accurate.

Our most recent evaluation compared Splitero to several companies across a number of factors, including cash offers, repayment terms, customer reviews, and fees. 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. We round all ratings to the nearest tenth decimal place.