Splitero Review: Access Your Home Equity

Splitero is a platform that provides home equity investments (HEIs) to eligible homeowners. 

Instead of taking out a loan or mortgage against your home, Splitero provides you with cash in exchange for a share of your home's appreciation or depreciation.

It sounds like a great deal, but is there a catch, and what types of homeowners are HEIs, like what Splitero offers, best-suited for? I'll cover all that and more in this full review! 

What Is Splitero?

Splitero is a California-based company that offers home equity investments (HEIs) as a flexible alternative to home loans and home equity lines of credit (HELOCs). 

What Does It Offer?

At its core, Splitero offers you a lump sum payment today in exchange for a share in your home's future appreciation (or depreciation). The key benefits to homeowners include no monthly payments, no income requirement (to qualify), a low minimum credit score, and flexible terms. 

Access Your Equity: Splitero's 4-Step Process

Here's a simple outline of how Splitero's process works: 

1. Prequalification: You initiate the process by providing Splitero with basic information regarding your home, equity, credit score, and location. Splitero will use this information to determine whether you meet the eligibility requirements. 

2. Complete the application: Once you've been prequalified, you can fill out an application with additional details, including how you plan to use the funds. This will help Splitero decide on an offer amount. 

3. Review the offer: Splitero will order a home appraisal, inform you of any additional required documentation, and arrange with you to sign the closing papers. 

4. Receive your funds: Once the deal has been signed, Splitero will arrange to send you the funds. 

Eligibility Requirements

Homeowner:

• Minimum credit score of 500 
• No employment or income required 
• Splitero must be able to be in 2nd position behind your mortgage or 1st position (if you don't have a mortgage)
• Properties held by a trust or LLC can qualify 

Property: 

• Property must be located in an eligible area of one of the following states: Arizona, California, Colorado, Florida, Nevada, New Jersey, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Virginia, or Washington
• Home must be valued between $200,000 and $500,000 
• Maximum investment is 25% of your home's value or $500,000
• Must be an owner-occupied single-family residence, condominium, townhome, or multi-family residential (2 to 4 units)  

Are There Any Fees? 

Yes, there are fees. It's important to note that HEIs work differently than a typical home loan or mortgage. While you won't have to make any monthly interest payments, there is an origination fee of 4.99%, which is pulled from your investment proceeds at closing. 

In addition, you may incur appraisal, escrow, title, and recording fees, which Splitero estimates at approximately $1,000, though these fees may vary. 

How Does Splitero Share In My Home's Appreciation Or Depreciation? 

Let’s say you own a house right now that’s worth $300,000.

You go to Splitero, and they offer you a lump sum payment, say $60,000, in exchange for a share of your home’s future value. In this example they take 20% of whatever the home is worth when you eventually settle (sell, refinance or reach the term).

Starting point:

• Your home value today: $300,000
• You receive cash from Splitero: $60,000
• Splitero’s share: 20% of the home’s future value

Two scenarios

Scenario A: Your home value goes up

Five years later, your home is now worth $400,000.
Because you agreed Splitero will get 20% of $400,000:

• Splitero’s share = 20% × $400,000 = $80,000
• You pay back the $60,000 they gave you + the “extra” $20,000 (because your home grew) = $80,000 total
• You keep the rest of the value: $400,000 − $80,000 = $320,000 (minus any mortgage etc)

Scenario B: Home value goes down
Five years later, your home is worth $250,000 (it dropped in value).

• Splitero’s share = 20% × $250,000 = $50,000
• So you owe $50,000 (which is less than the $60,000 you got)
• You did take a hit because your home lost value, and so did Splitero

What Is Splitero's Safety Cap? 

Splitero offers homeowner's a "Safety Cap", which provides some protection to the homeowner in the event that your home experiences significant appreciation in value. The Safety Cap is a maximum amount payable to Splitero if your property value rises significantly. 

How Does Splitero Compare? 

Splitero is similar to competitors like Unlock and Point, which also offer HEIs. Unlock's terms are typically shorter (10 years), while Point's terms can reach up to 30 years. Point also has a higher equity access limit of $600,000 and now offers home equity lines of credit (HELOCs) in addition to HEIs. 

How Do I Open An Account?

You can begin the prequalification process from the Splitero website, which only takes a few minutes. If you meet the eligibility requirements, you'll then have an opportunity to complete a full application. 

Is It Safe And Secure?

Splitero is a legitimate company, and HEIs are a well-established product offered by many competitors. Splitero is transparent about its fees, and its "Safety Cap" offers some upside protection for homeowners.  

That said, HEIs in general carry significant costs along with some risk and are not suitable for many homeowners. In addition to the origination fee and closing costs, you could end up giving up a big piece of your home's future value if it appreciates significantly before you repurchase the equity. 

Most homeowners with good credit scores, stable employment, and income to afford monthly payments should pursue a home loan or HELOC before considering an HEI. The HEI is a specialized product that's more suited to homeowners who cannot qualify for a home loan or HELOC due to a lack of income, employment, or previous poor credit. 

How Do I Contact Splitero?

You can reach Splitero via email at [email protected] or by telephone at (888) 365-3372. 

The company headquarters are located at: 

4365 Executive Drive STE 925
San Diego, CA 92121

Is It Worth It?

If you plan to continue living in your home and have accumulated significant home equity but are unable to access it through a HELOC or home loan, a Splitero HEI might be worth considering. You don't have to worry about monthly payments or interest charges, and you can repurchase your equity from Splitero at any time with no penalties. I strongly recommend that you speak with a mortgage professional, such as a mortgage broker, who can review all your options and help you make the best decision for you. 

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