Any experience using a HEI (Home Equity Investment) to invest in bonds?
Hello,
our house is paid off and recently I came across an HEI (Home Equity Investment) from e.g. https://point.com/
In short, a company gives us about $100,000.00 for up to 30 years and uses our house as collateral or safety. So, we don't have to pay any monthly interests or fees etc.
The way they make money is that at the start they value our house at, let's say, $400,000 and after 20 or 30 years they value it again at $500,000 and now, apart from us paying back the 'borrowed' 100,000 they get as well one third of the increase in value, so we would have to give them an additional $33,000.
With bond yields at or above 5% the idea occurred to me that I could get the money for buying bonds through an HEI and put it into 30 year treasuries.
What is there to lose?
In two weeks, I will turn 65, and I want to do it for 30 years. So even if we get very high inflation for a long time I should come out as a winner, I thought. But whilst writing this I realize that (theoretically) inflation could get so high for so long that after 30 years the value of the house has increased to e.g. $1400,000.00.
In that case I would have to give the bank an additional $333,333.00.
Which means in my case I would have to sell the house, but at age 95 it might not matter to me.
As you can see or read, I am still in the process of researching and contemplating this idea and so I welcome any constructive input.
Many thanks, RM