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Banking Institutions Have a Massive HELOC Opportunity in 2022

Banks and credit unions have a huge opportunity to quickly deepen relationships with new mortgage borrowers, and with current depositors. Consumers want to do more with their financial institution, and say it isn’t hard to win them over. Institutions just need to provide proactive education about products that meet their specific needs.

A 2021 Cornerstone Advisors’ Research report found that borrowers who didn’t do more business with their lenders said it’s because “they were never asked to do so,” or when they were asked, “the products … were irrelevant to their needs.”1 Conversely, borrowers who did conduct more business with lenders said it was because their lenders made it easy to do business; four in 10 also said their lender stayed in touch with them, provided technology and tools to help them manage their financial lives, and demonstrated they knew respondents’ needs.1

As forecasts for rising rates build urgency among consumers for decisions like renovating the kitchen, buying a new car, or just for access to credit secured by the equity in their home, they will be researching their options. Those banking institutions who meet that need for information with answers, and the right product to go with those answers, will grow their relationships with consumers in the year ahead.

During 2020 and 2021, some 24.6 million borrowers refinanced a mortgage or purchased a home.2 After closing on a new home, many mortgage borrowers go into decoration mode. Others decide they just can’t live without a dishwasher, a better water heater, or a Jacuzzi bathtub. Consumers wanting these upgrades are often in a unique financial stage – having recently closed a mortgage – that’s identifiable in banking data, and that makes a borrower an intuitive user of other financial products.

What consumer data indicates strong lead candidates for HELOCs? And how does that correlate to data points in banking organizations’ CRM?  

Take consumers wanting to use equity financing for a home improvement project, as an example. They can either obtain a low-or-no-fee, floating-rate line of credit (HELOC) that can be used at any time. Or they can obtain a cash-out mortgage refinance with a fixed rate and an origination fee. With so many homeowners recently paying an origination fee for a new mortgage – who probably want to keep a historic low mortgage rate for 30 years – many will prefer an equity line over a new mortgage.

Read our full opportunity report “Data Points to HELOC Opportunity from Consumer Urgency Boom.”

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