Real estate technology startup company Point wants to help homeowners who want equity for their properties but are not qualified under traditional home equity lines of credit. They are prepared to pay cash in exchange of a fair share of their homes' equity.
According to Inman, the company's founders discovered the need for this kind of service to help homeowners settle their debts, renovate their home, or refinance their mortgages as many of them hit 30s and are starting to buy properties of their own. The company is based in Palo Alto and Eoin Matthews, co-founder and chief business officer said, "In going through those experiences personally, it wasn't what we thought it should be. The mortgage process took a long time, there wasn't much we could do online and communication was inadequate."
Matthews also explained that along with other founders of Point, they thought that debt drove mortgages and the downside is that the consumer is taking all the risks involved. "Around 2008 when the housing crisis happened, investors just wanted to get paid, no matter what. There was very little alignment between what the homeowner was going through and what investors wanted," he said. "We think that's fundamentally problematic, and we wanted to come up with an innovative solution that combines equity and debt - not focuses on one or the other, but combines the two over time. We wanted to create a product that gives more flexibility to investors and homeowners so that when one party is in a pinch, it doesn't cause too much stress to the system."
In a report by Bloomberg, Nicole Bennett applied for an equity loan but she was refused because of a low credit score. It was then she discovered Point Digital Finance Inc., a startup company who gave her the necessary amount to pay a debt that was weighing her savings down. In exchange for the cash, Point, backed by Andreessen Horowitz, Vikram Pandit and Greylock Partners wanted her to give them a piece of her home.