The latest company looking to tackle the buy before you sell quandary goes by the name “UpEquity.”
They’re also making it easier for first-time home buyers to make a successful bid in a competitive market.
It all has to do with their “proof of funds” approach to mortgage underwriting.
Instead of simply providing a pre-approval, they give you the ability to make real cash offers, even if you need a home loan.
Let’s learn more about their various financing programs to see if one could be a good fit.
UpEquity Fast Facts
- Direct-to-consumer tech-enabled mortgage lender
- Specializes in all-cash offers, refinancing, and iBuying
- Founded in 2019, headquartered in Austin, Texas
- Funded roughly a half billion in home loans since inception
- Currently licensed to do business in 11 states
- Expected to launch in eight more states this year
UpEquity is a direct-to-consumer mortgage lender based in Austin, Texas.
They actually describe themselves as a tech-enabled lender, but what sets them apart is their ability to let you make all-cash offers on houses.
This goes for first-time home buyers and move-up buyers, the latter who often must juggle a home purchase and home sale at the same time.
The company was founded in 2019 by Harvard Business School alum Tim Herman, who like many other folks missed out on his dream home.
To rectify that, he and partner Louis Wilson set out to “solve accessibility problems in real estate.”
In other words, letting everyday Joes compete with investors and other fat cats, even if they can only muster a 3% down payment on a home.
Since inception a few years ago, the company has funded roughly a half billion in mortgages, with plans to do much, much more.
At the moment, they’re licensed to do business in Arizona, California, Colorado, Florida, Georgia, Idaho, Illinois, Oregon, Pennsylvania, Tennessee and Texas.
They expect to launch in at least eight additional states in 2022 thanks to strong growth and continued investment from their backing partners.
UpEquity Buy Before You Sell
The first program we’ll discuss is their “Buy Before You Sell” moving solution, which as the name suggests allows you to buy a replacement home before selling your existing property.
You can make a non-contingent, cash offer while also using the real estate agent of your choice.
And more importantly, it gives you the ability to sell your old home however you wish, instead of simply going the iBuyer route.
This means you can still sell the old home for top dollar, while remaining competitive on the new purchase.
The program starts at $500, and if UpEquity has to buy your home, you pay 1.95% of the gross resale price of your old home.
They say the majority of their customers pay only the $500 fee because most homes are ostensibly sold to third-party buyers, not UpEquity.
You also have to use them to get your new mortgage, which is partially their incentive to offer this deal, and also to ensure the loan closes.
Simply put, your all-cash offer has a higher likelihood of success, and you’ve got a buyer for your old home no matter what happens.
UpEquity All-Cash Offers
Next up is their “Buy with Cash” program that allows you to make an all-cash offer on home, whether you’re a first-time home buyer or move up buyer.
There is no cost to use this program, but you do need to use UpEquity to get your mortgage. Again, this provides compensation for them and ensures a timely and successful close.
The way it works is fairly straightforward. You apply online in 15 minutes and then they underwrite your loan file in 72 hours or less.
Similar to a mortgage pre-approval, you get approved for a certain loan amount, but instead of presenting the home seller with a financing contingency, you can make a cash offer.
This apparently gives you a 4X better chance of winning if going up against other offers. And if it’s just you making an offer, it might allow you to negotiate a lower purchase price with the seller.
They guarantee that you will close on time, but if your mortgage isn’t ready for whatever reason, UpEquity will buy the home with cash and sell it back to you at the original terms with no extra costs.
Aside from their all-cash offerings, UpEquity also allow existing homeowners to refinance their mortgages at supposed lightning-speed.
Again, this is due to their streamlined process and use of the latest technology, which powers those cash offers.
In fact, they say you can refinance in as little as 12 days, which is much faster than the industry average of 30-45 days.
You can thank their digital-first customer experience for that, along with their seasoned team of loan advisors.
They’re already in the mortgage origination business, so it makes sense to offer mortgage refinances as well.
However, most customers will likely choose UpEquity for the ability to make cash offers.
But if their mortgage rates are super competitive and closing costs low, they could still be an option to consider alongside other traditional mortgage lenders and mortgage brokers.
Loan Types Offered by UpEquity
- Conforming loans backed by Fannie Mae and Freddie Mac
- Jumbo loans
- VA loans
- FHA loans
- Minimum FICO score is 640
- Minimum down payment is 3% for first-time buyers, 5% for existing owners
UpEquity offers the core loan options available to home buyers and homeowners today.
However, it should be noted that FHA loans aren’t available via their Buy with Cash program.
And USDA loans also don’t appear to be an option given they’re quite specialized and UpEquity is a streamlined mortgage lender.
In terms of loan programs, they offer traditional 30-year fixed mortgages, and possibly 15-year fixed mortgages as well.
It’s unclear if they offer adjustable-rate mortgages, such as the popular 5/1 ARM.
They also note that the absolute minimum credit score required for a mortgage is 640, but that they prefer a 700+ FICO score.
With regard to down payments, the minimum is 3% for first-time home buyer and 5% for existing homeowners.
For investment properties, the minimum is 15% or more, depending on the property type in question.
They lend on all major property types other than manufactured homes and non-warrantable condos.
UpEquity Mortgage Rates
While you can’t see their mortgage rates without getting in touch with a sales representative or loan officer, they claim they’re competitive.
This is thanks to their proprietary mortgage processing technology, which they say reduces unnecessary human involvement.
The result is a significantly cheaper mortgage, with savings passed onto their customers, hopefully!
Either way, the draw of their programs is to help you win your dream home by beating out the competition.
So even if their mortgage rates aren’t the lowest, you could always apply for a rate and term refinance later if you found a significantly better interest rate.
The other question mark is lender fees – it’s unclear what they charge, such as a loan origination fee, underwriting fee, etc.
Be sure to inquire about all those fees as well and get your mortgage APR, which can then be shopped with other lenders.
UpEquity has a 4.9-star rating out of a possible 5 on Google from about 150 customer reviews, which is considered excellent.
And a 4.7-star rating from 26 reviews on Trustpilot. While it’s not a huge sample size, it is overly positive thus far for a young company.
Additionally, they are an accredited company with the Better Business Bureau and currently hold an ‘A’ rating based on customer complaint history.
Over time, we should get a better idea of their customer satisfaction ratings as more reviews come in.
To sum things up, UpEquity is a mortgage lender that specializes in all-cash offers. While that sounds counterintuitive, it makes perfect sense in today’s wild real estate market.
With competition intense, home sellers aren’t always patient enough to wait for a traditional mortgage to close.
So if you’re buying a home in a hot housing market, and/or looking to buy and sell concurrently, UpEquity could give you that edge to beat out other buyers, even cash buyers.
As noted, they also offer refinances, which if pricing is competitive, could also be worth looking into given their promise of lightning-speed.
UpEquity Pros and Cons
- Can apply online in just 15 minutes
- Offer a digital mortgage application process
- Average closing time of just 21 days
- Home buyers can make all-cash offers to win bidding wars
- Current homeowners can buy before they sell their old home
- You can use your own real estate agent and sell on your own terms
- Excellent customer reviews
- ‘A’ BBB rating, accredited business
The Maybe Not
- Do not publicize mortgage rates or lender fees online
- Limited choice of loan programs
- Not available in all states