There's an ongoing debate over whether your primary residence is considered an asset or not. Some say it is because it appreciates in value. Others say it isn't because you're not generating cash flow from it. There's a massive grey area in this debate as some will say owning a home helps shield you from the ever growing rent prices, provides a roof over your head, and it's both a place where you work and a place to sleep while being close to your office. There's a startup called Point that offers homeowners a lump sum of cash in exchange for a share of the home's future appreciation. It's different from a HELOC as it's not a loan but rather an equity stake. It's not like an Islamic loan as you don't make payments and any payments you make back to Point doesn't seem to come with Point having a lower stake in your home's future appreciation.

These type of loans aren't only being marketed towards homeowners but also aspiring homeowners. For current homeowners, they can pay off their mortgage by offering a stake of their home equity to lenders at an amount that would let them pay off their mortgage. For aspiring homeowners, this new form of financing will allow them to better compete for homes without having to worry about the mortgage payments down the line. While there is a lack of regulation in this niche, Wall Street investors are funding companies like Point in hopes of making this new form of financing mainstream.

By allowing people to live in a place and not have to worry about making payments on the house each month, people will have more money to invest in stocks, pay down student debt and other debt, and increase their consumption in other ways like more traveling and buying newer and better vehicles. I am excited to see how this industry grows as this form of financing looks beneficial to households. If you're going to live in a place forever, might as well put yourself in a position where you still have the stake in the home while also freeing yourself from the payments you need to make to keep the home.

Source: https://www.businessinsider.com/home-equity-investments-heloc-refinance-loan-investors-homeownership-housing-market-2024-2