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The cost of higher education can be a major hurdle for many families. An Equity Sharing Agreement, often compared to a Home Equity Investment (HEI), can offer a way to use the value in your home to fund a degree or certificate without a monthly payment.
Instead of monthly loan payments, you share in the future change of your home’s value, paid when you sell your home, buy out the agreement, or after 30 years pass.
The Challenge: Rising Tuition Costs
Meet James. James has lived in his home for 12 years and has seen its value grow significantly. His daughter was recently accepted into a competitive nursing program, but the total cost for the remaining two years was $55,000. James wanted to help his daughter graduate without the heavy burden of student loans, but he didn’t have enough cash in his savings to cover the tuition and books upfront.
Why Traditional Student Loans Didn't Work
James first looked into Parent PLUS loans and private student loans. He found that many of these loans would require him to start making monthly interest payments almost immediately. With retirement approaching in a few years, James was hesitant to add a new "must-pay" monthly bill that could last for a decade or more. He also considered a home equity loan, but the high interest rates and the requirement of a new monthly mortgage payment felt like too much of a financial strain. He needed $55,000 now, but he wanted to protect his savings and monthly cash flow for more important expenses.
The Solution: A Shared Investment in the Future
James decided to use an Equity Sharing Agreement. Unison provided him with the $55,000 needed to pay his daughter’s tuition in full. In exchange, Unison will share in a portion of the home’s future change in value when James eventually sells the house or the agreement reaches its term. Unison can share in both growth or loss, as the home’s value changes.
- No Monthly Stress: James did not have to add a new payment to his monthly budget, allowing him to stay on track with his retirement savings.
- Flexibility for the Family: James was able to provide the education his daughter needed without the burden of traditional student loans.
- Shared Future Value: Unison shares in a percentage of the home’s total future value, partnering in both potential growth or loss.
The Outcome: Graduation Without the Debt
Today, James’s daughter is finishing her degree, and James won’t ever pay interest on a student loan. He successfully used his home's "paper wealth" to create a real-world opportunity for his child.
As James said: "I wanted my daughter to focus on her studies, not on how she would pay back loans for the next twenty years. Partnering with Unison allowed me to unlock $55,000 from my home's equity to pay for her school. It was a relief to help her without having to worry about a new monthly bill myself."
Using an Equity Sharing Agreement can be a smart way to invest in your family’s education. Unison is here to help you turn your home equity into a foundation for the next generation.