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Truehold vs. Home Equity Loans: Which One Is Best for You?

Weigh your equity options, and see the Truehold difference for yourself.

Want to crunch the numbers on your home equity? Our financial calculator is a simple, stress-free tool to help you make the right financial choice: a traditional home equity loan or a Truehold sale-leaseback.

This free online tool compares the financial outcome of taking out a home equity loan versus initiating a sale-leaseback with Truehold.

To start, you’ll need to input these figures:

  • An estimate of your home’s value
  • Your outstanding mortgage
  • The monthly payment your mortgage
  • Your property tax
  • The sum of additional expenses like insurance and HOA fees

Using the numbers attached to your property, the home equity loan calculator will give you a fully custom look at the following for both a standard home equity loan and a Truehold sale-leaseback:

  • The amount of equity you’d unlock
  • Your monthly payments, whether toward rent or your mortgage
  • Other recurring expenses (or lack thereof), like taxes, insurance, and maintenance

The financial calculator will also reveal how much money you could save with Truehold.

Here’s The Deal On Home Equity

Equity refers to the value of your home, minus your outstanding mortgage. You can think of it as the amount of your home that you own or the percentage you’ve already paid for. For example, if your home was worth $500,000 and you had $100,000 left to pay on your mortgage, the value of your home’s equity at that moment would be $400,000.

People often refer to equity as being “locked up” in a home. What they mean is that you technically possess a valuable sum, but you can’t access that money—it’s not available for you to use. When big expenses arise, like medical bills, college tuition, emergency repair, or a new vehicle, many homeowners choose to unlock their equity and access their cash.

Truehold’s home equity solution allows you to obtain that value debt-free without moving out of the home itself.

So, How Do Home Equity Loans Work?

To unlock their equity, some homeowners will choose to take out a home equity loan from the bank. Often referred to as a second mortgage, this is a loan taken out against the value of your home’s equity.

Per our earlier example, where you have $100,000 left to pay on your $500,000 home, this means a home equity loan could net you $400,000 dollars from the bank, which would serve as a home equity payment that you’d have to pay back monthly over time—with interest. Home equity loan interest rates will usually be lower than on a credit card, but higher than on your primary mortgage, meaning this increased access to capital comes at a price.

Because the collateral for the loan term is your house itself, home equity loans can be risky for some homeowners and require a very careful arrangement of family finances. While these loans offer an initial burst of financial freedom, they’re still a form of debt that exists within a repayment period.

Comparing Conventional Loans And The Truehold Method

Accessing your home equity can be a life-changing decision. Truehold’s sale-leaseback method offers a debt-free alternative to taking out a loan, wherein you can obtain the cash value of your home and continue living in it.

So, how do the options two stack up?

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  • Receive the value of your home equity, but pay it back over time with interest
  • Continue paying property tax, insurance, HOA fees, and other expenses
  • Take responsibility for all major repairs
  • Make a monthly commitment to paying off debt, likely for decades
  • Watch the value of your home spike and drop as the market changes
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  • Receive the value of your home equity, and use it as you please
  • Stop making regular payments like property tax, insurance, HOA fees, and more
  • Turn to your landlord—Truehold—for repairs and maintenance
  • Make monthly rent payments as long as you decide to stay in your home
  • Become fully debt-free in a snap
  • Protect the value of your home from market fluctuations

Frequently asked questions

What is a sale-leaseback?
A sale-leaseback is a transaction in which we buy your home from you, which unlocks your home equity, but you can remain there as a renter. You’ll have the cash value of your property available for whatever you need without uprooting your entire life.
What is a home equity line of credit?
Like a home equity loan, a HELOC allows you to take out cash and pay it back monthly using your home as collateral. As the term “line of credit” suggests, a HELOC functions like a credit card, meaning that you won’t pay a balance on the months in which you don’t use the money.
Can I stay in my home forever?
Truehold’s goal is to help people stay in their homes for as long as they’d like. So long as tenants comply with their lease and pay the agreed-upon monthly rent, they’re entitled to live in their home as long as they choose. Some customers choose to stay for a short period and use their new cash flow to finance a move, while others enjoy their home for decades to follow.
How long does it take to go through the process with Truehold?
We know how stressful it can be to sell your home. With Truehold, we can complete the sale and negotiations in as little as 30 days.
Who determines the value of the home? How is this done?
Truehold uses neighborhood data to offer competitive pricing and determine the total amount for rent. We’ll also hire an unbiased third party to perform an inspection.
What kind of repairs are covered under a Truehold lease?
We take care of major repairs, including plumbing leaks, roof damage, and HVAC issues. We also recommend local service providers on your resident portal for minor repairs.
Does working with Truehold involve taking out a loan?
No. One of the major benefits of our sale-leaseback model is that there’s no debt acquired, only paid off. With Truehold, you can access the cash value of your home equity without worrying about fluctuation in the real estate market or interest rates.
I still have questions about working with Truehold. Who can I speak to?
Our real estate specialists are available to explain the process, provide personalized advice, and answer any questions. Call 314-353-9757 or fill out this form to start the process today.

Further Reading

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