Home Tap and other equity-sharing agreements have become popular in California, especially among homeowners who own luxury homes but don’t have the liquid assets to renovate or remodel they way they would like. These programs offer upfront cash in exchange for a share of your home’s future appreciation. They can be appealing, but many homeowners later discover that they can be far more costly than they expected. We’ve worked with clients who no longer want their Home Tap or Home Equity Investment and wonder if they have a way out.
Why Do Home Tap and Equity-Sharing Loans Sometimes Become So Expensive?
With equity-sharing programs, you don’t just repay the cash you borrowed — you give up a percentage of your future home value. If your home appreciates significantly, the amount you owe can be tens (or even hundreds) of thousands of dollars more than a traditional loan payoff.
For example, if you borrowed $200,000 in exchange for 10% of your home’s appreciation and your property rises in value by $1 million, your repayment could exceed $300,000. That’s why so many Malibu and Southern California homeowners look for exit strategies sooner rather than later. If your Home Tap loan is working for you, great! If it’s a financial burden or a hassle at this point, you need to understand that you have options.
Can You Refinance to Pay Off a Home Tap Loan?
Yes, and we have helped many Southern California homeowners do just that. The most common solution is a jumbocash-out refinance, which allows you to pay off your Home Tap or equity-sharing loan in full while replacing it with a traditional mortgage. This works especially well for luxury homeowners who have built significant equity, which is common in high-value markets like Malibu, Santa Monica, and other coastal communities.
What Are the Alternatives to Refinancing?
Some buyers are concerned about refinancing. First of all, if your concern is that you’re self-employed and not sure you can qualify, you should know that we specialize in helping self-employed borrowers access financing. However, if typical refinancing just isn’t right for you, these are your other options:
- Sell Your Home: You’ll pay off Home Tap at closing, but you’ll also lose your property and future appreciation potential.
- Buy Back Early: Some programs allow homeowners to “buy out” the agreement earlier, but the cost is often based on an updated appraisal, which may still be expensive.
- Cash-Out Refinance or HELOC: For homeowners with good credit and strong equity, these options are often cheaper and more flexible than equity-sharing loans.
How Do I Qualify for a Stated Income Jumbo Loan?
Many of our clients are self-employed or have complex income streams that don’t fit traditional W-2 guidelines. Maybe investments make up a large portion of your income, you’re a gig worker, or your income is better shown through P&L statements or bank statements than tax retursn.
That’s where stated income jumbo loans come in. These allow you to qualify using:
- Business profit & loss statements
- Bank statements
- Asset depletion or other alternative documentation
This approach makes refinancing possible even when traditional underwriting says “no.”
Is Home Tap Ever Worth It for California Homeowners?
For some homeowners who cannot qualify for any other financing, Home Tap may serve as a temporary solution. However, it’s rarely the most cost-effective option. If your home appreciates — and in California markets like Malibu, Pasadena, or Newport Beach, it usually does — your repayment can be significantly more expensive than a refinance. If you’re concerned about what is happening with your home equity investment, talk with our in-house expert Jackie for some guidance.
Why Experience Matters When Exiting a Home Tap Agreement
At Summit Lending, we’ve helped California homeowners save tens of thousands of dollars by negotiating the lowest possible payoff and replacing equity-sharing agreements with smart financing solutions. With over 100 five-star reviews across Google, Zillow, and Facebook, our team has the expertise to handle complex jumbo and non-QM scenarios.
Next Steps: Explore Your Options in Southern California Luxury Real Estate Refinancing
If you’re stuck in a Home Tap loan or other equity-sharing agreement, you don’t have to wait until you sell your home. A well-structured refinance can give you back control of your equity and free up cash for renovations, debt consolidation, or retirement planning.
Contact our team today to learn whether a jumbo cash-out refinance or alternative lending solution is right for you.
