How to Use Home Equity for Home Improvements

Sherry M. and her husband love their home in Damascus, Oregon. They've lived there for nearly 10 years, but are the first to admit it needs major renovations.

“Although we love it dearly, it’s almost 100 years old,” says 73-year-old Sherry, who is retired. “We’ve had to invest in major updates, such as a new roof, new gutters, plumbing and electrical repairs.”

Sherry and her husband started their own business in 2013 and plan to stay in their family home for the long haul. To fund home improvements, they first took out a home equity line of credit (HELOC) — but it wasn’t enough to cover all their expenses.

“Our monthly budget didn’t have a lot of wiggle room and we worried about covering future emergencies,” Sherry says. “At the same time, the value of our home had almost doubled since we purchased it, and we were beginning to look around at refinancing or other options that might help us gain a little breathing room.”

Hesitant to take on more debt, Sherry says that’s when they discovered Unison — a platform offering flexible, innovative ways to access home equity without taking on traditional loan debt.

“After doing a lot of research, we decided that equity sharing was a good solution for us,” Sherry says. “We could access the unused equity in our home without having to make monthly payments, and the already accrued equity would always be ours.”

Unison offers homeowners a range of options to convert their equity into cash. Whether it's through an equity sharing agreement (ESA) that offers cash up front with no monthly payments, or an equity sharing home loan (ESHL) that offers monthly payments about half that of traditional loans — the goal is the same: help homeowners stay in control while putting their equity to work.

Home Improvement Booms During COVID-19

2020 was a record-breaking year for home improvements. According to Harvard University’s Joint Center for Housing Studies, Americans spent nearly $420 billion on home renovations during the pandemic.

A 2021 State of the American Homeowner report from Unison revealed that nearly half (45%) of surveyed homeowners planned home improvement projects to make their spaces more comfortable — a reflection of how homes were transformed into offices, classrooms, gyms, and more during COVID. Of those who refinanced in 2020, 72% planned a renovation in the following year.

Increased demand for renovations, combined with rising home values and tight housing inventory, led millions of Americans to turn to their home equity to fund large expenses like remodeling.

Sherry was one of them. With the housing market heating up and no plans to relocate, she decided updating her home made more sense than buying anew — and Unison helped make it possible.

“After we signed with Unison, we were able to pay off all our bills, our credit scores zoomed up, and we’ve been able to keep our debt load low,” she says. “We even used some of the proceeds to give cash gifts to our children, which was a great feeling.”

By the end of that year, American homeowners collectively held $7.3 trillion in tappable equity — the largest amount on record, according to Black Knight, Inc.

Navigating Traditional Options

While home equity can be a powerful resource, accessing it through traditional channels isn't always easy.

Some banks paused new HELOCs during the early months of the pandemic, and loan qualification can be challenging — especially for retirees or self-employed homeowners. Debt-based options like HELOCs, cash-out refinances, and home equity loans all require monthly payments, often with variable interest that can increase over time.

For homeowners on a fixed income or managing tight budgets, these options may not provide the flexibility they need.

A Platform for Smarter Equity Access

Unison exists to offer a new kind of choice — one designed to meet homeowners where they are, without forcing them into rigid financial structures.

Through the Unison platform, homeowners can explore multiple equity-based options, including:

• Equity Sharing Agreements (ESA): Get a lump sum of cash today, with no interest or monthly payments. In exchange, Unison shares in the future change in your home’s value — up or down — when you sell or settle the agreement.

• Equity Sharing Home Loans (ESHL): A loan based on your home equity, but with a twist. Payments are typically about half that of a traditional loan, thanks to significantly lower rates. Instead, a portion of your future home appreciation is used to help lower monthly costs.

Depending on your financial goals — from paying off debt to remodeling a bathroom, or helping your kids with school — Unison may be able to help you tap your home’s value in a way that works for you.

“You need to do your homework to make sure equity sharing is a good fit,” Sherry says. “But we’ve been very happy with the program, as well as the great customer service and assistance when we have questions.”

Disclaimer: This content is provided for general informational and educational purposes only and is not intended to serve as financial, investment, legal, tax, or lending advice. The information presented may not apply to your specific situation, and actual outcomes can vary based on individual circumstances, market conditions, and applicable laws. Home equity sharing agreements and loans involve risks, including the potential loss of future home appreciation or other financial implications. Terms, availability, and eligibility for any products mentioned may differ by state, lender, or other factors. Testimonials and customer stories featured are from actual users and reflect their personal experiences, but they are not guarantees of future performance or success, and results may vary. They do not necessarily represent the experiences of other customers and are not indicative of typical results. We strongly recommend consulting with a qualified financial advisor, attorney, or licensed professional before making any decisions or entering into agreements. Unison Mortgage Corp. is a licensed lender (NMLS ID 2574289); this article may include promotional content related to its services.