Eoin Matthews, Co-Founder of Point, joins Cheddar News' Closing Bell, where he explains how his platform is helping homeowners and offers a better alternative to debt. Matthews also discusses how pandemic conditions have led to a surge in demand for his company.

Closing Bell

Point Raises $115 Million in Effort to Help Homeowners Financially

Point has raised 100 and 15 million in new funding in its mission to help homeowners, while the fintech platform, aiming to provide homeowners access to equity financing in exchange for a fractional share of the future value of their homes. And joining me now is Owen Matthews, co founder of points Owen, thanks so much for coming on the show and tell me more about your platform and how it is trying to help homeowners when it comes to equity financing. Listen, thanks for having me on today and points been around since 2015 and our core product is what we call a home equity investment, And that's an alternative to debt for homeowners, where instead of having a monthly payment, we offer a product where homeowners share in the future appreciation on their home and there is no monthly payment. And this has proved really valuable for homeowners as an alternative to debt since, since we started a company right in 2015 and it's been a lot of momentum recently, so we're really happy with this funding. And so what kind of equity? Oh, and if there is an equity sharing component to this, what kind of equity can the homeowner expect to have at the end of a mortgage? Sure, well, at the end of a mortgage, after 30 years of paying down your mortgage, you don't own the home outright. So you'd have all the equity in the home, when we're typically working with a homeowner, they may own anywhere from 35 to 45% of the home would be quite typical. So the mortgage as a percentage of their home value is going to probably be 55% And we'll go up to an 80 What we called loan plus optional value ratio. So homeowners after they received funding from point would probably have 20% of the home still. Now, the important thing about our product is that going forward, we share an appreciation. So the homeowner continues to own the equity they have in their home and what we're taking an investment on is the future appreciation on the property. Got it. Um So perhaps that sale prices sounds like that's how you gauge the future appreciation, right? Exactly, a future sale price, or if the homeowner chooses to get out of the contract before they sell the home, they would do that with an appraisal and perhaps they're doing a cash out refinance, they can pay off point. In fact, probably 60% of our customers choose to pay off point prior to a sale, usually with a cash out refinance on their first mortgage. Okay, um What are the risks involved here? I think that there's a lot of anxiety out there right now, a battle recession about rates on the rise, Will people have jobs stability and security as layoffs and hiring freezes happen to continually make some of these payments? How do you manage that at points? And that's a great question. I think that's the whole raison, the extra of a product, like our home equity investment or H. I. Product is that it's a product with no monthly payments. So for homeowners who have some anxiety about cash flow, this is a very cash flow friendly friendly product, It's got a 30 year term, the homeowner chooses when to pay us off and the amount they pay us off is based on the value of the home. So it's if the homework to depreciate significantly, the homeowner could be paying us back less than we give them initially, and that would not be a default. That's really a very different proposition than debt. On the investor side. There's the other side of this that point has to manage and ultimately we have to be good at making prices so we will risk adjust the price of a home to reflect what we think are appropriate levels of near term risk and shock that the system. Yeah, another question that I have for you, as is as rates rise aggressively, mortgage rates certainly skyrocketing this year, making homes less affordable. Right? The average value of a home increasing double digits as simply because of rising rates with inventory of available homes already being an issue pre pandemic. How is that impacting your company aggressive rate rises higher mortgages on the way, And it means a lot more homeowners are interested in alternatives to debt. So it's driven a surge in demand and we were already seeing unprecedented, unprecedented demand last year, before mortgage interest rates started going up, we offer, for example, a home equity line of credit in California as a complement to our home equity investment. And we see an awful lot more people now choosing to go to the home equity investment route because interest rates are much higher and they're anticipating monthly payments on debt that just are not palatable at this point in time, it's driven a lot of demand. Okay, Owen Matthews, I believe it is a co founder of Point, Congratulations on the round and thanks for coming on.