HELOCs are “Raging Back”
A recent report on HousingWire says a combination of rising home values and the fact that nearly two-thirds of borrowers with at least some home equity have mortgage rates below 4% (with no benefit from a refinance) is helping to propel a resurgent market for home-equity lines of credit (aka HELOCs). Citing data from the The Federal Reserve Bank of New York’s Q2 2022 Household Debt and Credit Report they say limits on HELOCs jumped by $ 18 billion this year – which is the first substantial increase in HELOC limits since 2011. A home-equity line of credit (HELOC) allows a homeowner to tap equity in their home without incurring a much higher first-lien mortgage through a cash-out refinancing.
“Mortgage lenders are now considering adding home-equity lending to their portfolios as they look for growth in a declining refinance market and seek opportunities to cross-sell to their existing customer base by tapping into historic amounts of home equity,” said Joe Mellman, senior vice president and mortgage business leader at TransUnion. “Consumers are increasingly interested in HELOC and home-equity loan lending — leveraging rising home values to access affordable capital.”
Click here to read the full story at HousingWire.
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