What is paid, what is recorded, and what falls due.
A Home Equity Agreement is a purchase of a partial interest in the future value of a property. Barastone makes an upfront payment to the homeowner in exchange for a contractual right to a percentage of the home’s value at settlement, calculated using the Settlement Multiplier in their agreement.
A security interest is recorded
Barastone records a security interest against the property. It is a matter of public record, and it may affect the homeowner’s ability to refinance. This is not a silent arrangement.
A Final Settlement Amount falls due
A Final Settlement Amount will be due at the end of the Investment Period or upon sale or refinance. This is not a grant — the obligation is deferred, not eliminated.
The homeowner bears the running costs
The capital provider's downside is limited by equity devaluation provisions and floor calculations. The homeowner bears 100% of property taxes, insurance, and maintenance costs regardless of home value performance.
Nothing.
A Home Equity Agreement has no monthly payments.
A Final Settlement Amount based on your home's value at that time is due at the end of the Investment Period or upon sale or refinance. In a high-appreciation scenario, this amount may substantially exceed the investment proceeds received.
Unlike a loan, no interest accrues on the investment proceeds and there is no fixed repayment amount. What is owed is calculated once, at settlement, on the home’s value at that time.
The calculation
The capital provider's return is calculated using the Settlement Multiplier applied to your home's value at settlement. A Final Settlement Amount will be due at the end of the Investment Period or upon sale or refinance. The effective cost in high-appreciation markets may exceed a comparable HELOC or home equity loan.
Six steps, and the partner appears in exactly one of them.
01
A partner makes the introduction
A remodeler, solar installer, credit union or lender introduces a homeowner through a tracked link or a branded page. That is the entire extent of the partner’s role in the transaction.
02
Barastone reviews the home
Intake, property valuation and investment review happen on the Barastone platform. Review centres on the home and its equity position rather than on a minimum credit score. Barastone determines eligibility; not every homeowner qualifies.
03
Disclosures, then closing
The homeowner receives the consumer disclosures required in their state, with their own figures in them, and closes with a notary. A security interest is recorded against the property at this point.
04
Barastone funds
The homeowner receives investment proceeds. Barastone funds every agreement through its institutional capital partner; the introducing partner funds no part of it and carries no exposure to it.
05
The Investment Period runs
Barastone services the agreement for its term. The homeowner keeps full ownership, control and every decision about the property, and remains responsible for property taxes, insurance and maintenance throughout.
06
Settlement
On sale, on refinance, or at the end of the Investment Period, a Final Settlement Amount is calculated from the home’s value at that time using the Settlement Multiplier in the agreement. The homeowner may also settle earlier.
Settlement is capped.
Two ceilings run alongside every agreement: the homeowner protection cap, which compounds at no more than 20% annualized, and the Settlement Multiplier applied to the home’s value, which rises with the home. Settlement follows whichever is lower, in every year of the term.
Your role ends at the introduction. Ours starts there.
You
Your role begins and ends here.
- Introduce the homeowner
- Share Barastone-approved materials
- Use your tracked link or branded page
Barastone
Everything past the introduction.
- Application intake
- Property valuation
- Investment review and eligibility
- Consumer disclosures, state by state
- Closing and e-notary
- Funding
- Servicing for the full Investment Period
- Settlement at sale, refinance or term end
Nobody asks you to
The reason a trade business can do this at all.
- Fund any part of the agreement
- Carry balance-sheet exposure
- Take an application
- Collect, store or transmit homeowner financial data
- Make an eligibility or investment decision
- Negotiate terms with the homeowner
- Operate compliance or servicing infrastructure
If you are a homeowner reading this.
Barastone does not take applications from homeowners. A Home Equity Agreement reaches you through the professional handling your project — the contractor, installer, lender or credit union you are already working with.
What this means for homeowners