Why Consumers Ask for HELOC

Posted by Amrock

According to TransUnion*, approximately 10 million consumers expect to originate a home equity line of credit (HELOC) between 2018 and 2022, more than double what originated in the previous five years. The bureau projects 1.6 million new HELOC borrowers this year and that number is projected to jump to 8.4 million in 2019-2022.

Are you prepared to offer this popular equity solution? Discover how to unlock HELOC for your clients today.

Why do consumers use HELOC? TransUnion lists the most common reasons:

  • 30% are debt consolidations, which combine balances from other credit products with lower interest rates.
  • 29% are due to large expenses, which finance a credit need such as a home renovation project.
  • 25% are refinances, which help clients obtain a better loan rate.
  • 9% are for “piggybacks” – designed to supplement a down payment.
  • 7% are undrawn, meaning clients take out a line of credit for a rainy day.

HELOC is More Useful Than Ever

There are many reasons why HELOC is becoming more popular among consumers. Interest rates are currently on an uptick, but home equity loans allow homeowners to keep the original rate of their primary mortgage, potentially saving thousands of dollars. Consumers can certainly use that “interest locked” line of credit to pay off other high-interest loans, like holiday expenses.

Homeowners today also statistically stay in their homes four years longer than they did ten years ago**, meaning they also generally have more home equity to draw from. Using home equity to renovate a home can increase the valuation; sometimes a worthy investment to grow wealth in the long term.

Amrock Supports HELOC

HELOC is a choice Amrock supports when lenders want to unlock their clients’ equity as quickly as clients need it. Our products include fast legal and vesting reports, tax certificates, junior loan policies (JLP) and mortgage modification policies (MMP). We have customized options, and our data speed gives you the power to unlock your client’s equity quickly and efficiently.

*The Return of the HELOC: The Number of Consumers Opening HELOCs May Double During the Next Five Years

**Will 2019 bring a boom in home equity lending?