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Data Points to HELOC Opportunity from Consumer Urgency Boom

U.S. homeowners now have access to an average of $178,000 in tappable equity.1 Now, though, with rising rates anticipated to curb home prices, and thereby equity, consumer urgency is building for home equity lines of credit (HELOC). Here are the data indicators banks and credit unions can use to find and serve borrowers for whom a HELOC is an excellent fit: 

The HELOC Opportunity: Record Levels of Equity 2

Homeowners have witnessed year-over-year equity increases for the past 10 years.

Homeowners Favor Equity Lines over Equity Loans 3

How Can Banking Organizations Identify Prime HELOC Candidates in Their Data?

Consumers wanting to use equity financing can either obtain a low-or-no fee, floating-rate HELOC that can be used at any time, or obtain a cash-out mortgage refinance with a fixed rate with an origination fee. With so many homeowners so recently paying an origination fee for a new mortgage – most at historic low rates – consumers will prefer an equity line to a new fee and higher 30-year mortgage rate. Banks and credit unions can use data to identify customers or members with the following five data sets.

What Data Indicates Prime HELOC Candidates?

We can also show you “Four Ways to Deepen Relationships with Mortgage Borrowers and Banking Depositors.” 

Sources:

  1. Black Knight, “October 2021 Mortgage Monitor.”
  2. Black Knight, Analysis published by The Basis Point. November 2021.
  3. Financial Brand, “Consumers Ditch Branches and Use Digital Channels for Home Equity Applications.” November 2, 2021.
  4. Marketplace, “Could home equity lines of credit come back in 2022?” December 6, 2021
  5. HousingWire, “Purchase mortgage volume projected to clear $2.1T in ’22, ’23.” January 21, 2022
  6. Experian, “State of Credit 2021: Rise in Scores Despite Pandemic Challenges.” September 7, 2021
  7. Bankrate, “Survey: Less than half of Americans have savings to cover a $1,000 surprise expense.” January 19, 2022