Buyers and sellers are quickly realizing that traditional home loans don’t work when rising interest rates and home prices combine to make buying a home more expensive than ever before. Knock, the fast-growing fintech company that makes all homebuyers Power Buyers, today introduced two new features that give homeowners the ability to tap into the unprecedented equity gains they’ve amassed in their current house to make buying a new home more affordable.
Effective today, homeowners who take advantage of the Knock Home Swap1, which includes a competitively priced mortgage and 100% of the financing necessary to buy before you sell, are eligible to use the Home Swap’s interest-free home equity advance in two ways to lower the interest and monthly payments on their new home. They can use it to:
- Buy down their mortgage rate by as much as 0.75%
- Make up to a 30% down payment on their new home, which would reduce their monthly payment further by as much as an additional one-eighth of a percentage point
“With mortgage rates doubling since the start of the year and home prices continuing to grow at double-digits, buying a home has gotten a lot more expensive. At the same time, homeowners have more of their wealth tied up in their home than any other time in history,” said Knock Co-Founder and CEO Sean Black. “Thousands of homeowners have used the Knock Home Swap to work with the agent they trust to compete with cash offers to win their dream home and then move on their own timeline and sell for top dollar. Now, they can use it to buy down their rate and put more money down, which will drive their rate even lower.”
In just a year, the typical U.S. homeowner saw their home equity increase $55,300 in 2021, according to CoreLogic, and with the median-priced home reaching a record of $416,000 in June that has only continued to increase in 2022. A homebuyer purchasing a median price home could reduce their mortgage payment by nearly 14%, or $259 a month, by leveraging the Home Swap’s no interest equity advance to increase their down payment from 20% to 30% and qualify for a lower interest rate. Paying a point to lower their interest by 0.5% would trim an additional $90 per month, saving more than $32,000 over the life of the loan.2
The Knock Home Swap’s interest-free equity advance loan covers the down payment on the new home, home prep and up to six months of mortgage payments on the old house. Home Swap customers are able to sell their old house on the open market for the maximum sale price after they’ve moved into their new home, avoiding the hassle of living through repairs or showings.
Knock also provides a 30-day closing guarantee, Home Prep Concierge and backup offer on the old house in the unlikely event that it doesn’t sell within six months. More than 98% of Knock homes sell in 90 days or less, with 88% selling in 30 days or less.
Knock partners with more than 350 real estate brokerage firms with 120,000 agents in approximately 5,900 ZIP codes to bring its innovative home loan financing solutions to homebuyers nationwide on home purchases up to $3 million.
1Mortgage loans offered by Knock Lending LLC. NMLS 1958445. Equal Housing Lender. For licensing information go to: www.nmlsconsumeraccess.org.
2This example is for educational purposes only, rates are subject to change at any time.
Knock is rewriting the rules of homeownership with mobile technology and innovative home financing solutions that make all homebuyers Power Buyers. Knock’s flagship Home Swap™ product empowers consumers with a non-contingent offer on their phone to buy the home they want before selling the home they have, providing certainty knowing you’ve found your dream home and the convenience of not having to live through repairs or showings. Knock GO™ (Guaranteed Offer) is a cash-like home loan solution for first-time homebuyers looking to compete in today’s hot housing market.
Launched in 2015 by founding team members of Trulia.com, Knock currently operates in 75 markets nationwide. Knock has raised $900 million in debt and equity from top-tier investors, including Foundry Group, Greycroft, RRE, Parker89 and The National Association of Realtors®, giving NAR’s 1.5 million members the ability to market Knock’s homeownership solutions to their clients. For more information visit: knock.com.