With

elevated
levels
of
home
equity
across
the
U.S.,
mortgage
lenders
are
making
home
equity
lending
more
accessible
to
reach
more
borrowers.

Nearly
all
of
the
companies
analyzed
that
provide
home
equity
lending
have
a
digital
application
process,
while
about
half
incorporate
a

soft
credit
pull
before
they
fully
underwrite
these
loans,
according
to
a
report
released
Wednesday
by
intelligence
firm

Keynova
Group.

Keynova’s
report
reviewed
the
digital
capabilities
and
user
experiences
at
12
of
the
top
bank
and
nonbank
lenders
in
the
country.
Depository
lenders
analyzed
included


Bank
of
America,


Chase,

Citi,

Citizens,

PNC,

Truist,

U.S.
Bank
and


Wells
Fargo.
Non-depository
lenders
in
the
study
included

Freedom
Mortgage,

loanDepot,

Rate
and

Rocket
Mortgage.

One-quarter
of
these
lenders
offered
accelerated
closing
options,
including
two
lenders
that
advertised
home
equity
funding
in
as
little
as
one
week.

More
than
half
of
these
home
equity
lenders
enabled
customers
to
lock
in
a
rate
online
at
times
when

interest
rates
are
rising.
And
one-third
promoted
the
ability
to
digitally
lock
or
unlock
a
fixed-rate
loan,
enabling
borrowers
to
return
to
an

adjustable
rate
if
rates
are
declining. 

To
minimize
near-term
repayment
expenses,
about
20%
of
lenders
offer
the
option
for
qualified
customers
to
make
interest-only
payments
during
draw
period
for
a

home
equity
line
of
credit
(HELOC).

U.S.
homeowners
who
are
sitting
on
increased
amounts
of
equity
have
tapped
into
HELOCs
as
home
prices
have
soared
since
the
COVID-19
pandemic.
Between
the
first
and
second
quarters
of
this
year,
HELOC
originations
jumped
by
26.5%
to
about
286,000
deals
in
the
second
quarter
of
2024
from
the
previous
quarter,
according
to

recent
data
from

Attom.

HELOCs
accounted
for
$53.6
billion
in
volume
in
Q2
2024,
up
from
$42
billion
in
the
prior
quarter
and
just
shy
of
the
$53.7
billion
volume
in
Q2
2023.

Lenders
also
expanded
digital
access
to
information
about
alternatives
such
as

down
payment
assistance
(DPA)
programs
for
buyers
or
loan
modifications
for
current
homeowners,
the
Keynova
study
showed.

Half
of
the
lenders
reviewed
for
the
report
provided
customized
low
down
payment
products,
while
42%
supplied
information
on
grants
and
other
resources
to
support
affordable
homeownership. 

For
existing
homeowners,
83%
of
lenders
offered
online
content
that
shows
how
to
start
the
process
for
a
loan
modification,
repayment
plan
or
alternative
financial
assistance.  

Amid
affordability
challenges,
lenders
have
rolled
out
more
DPA
programs,
which
have

become
a
saving
grace
for
buyers
who
aren’t
able
to
pay
a
lump
sum
at
closing. 

In
Q2
2024,
the
number
of
DPA
programs
for
homebuyers
reached
an

all-time
high,
according
to
a
report
from

Down
Payment
Resource.
First-time
buyers
had
1,445
programs
across
the
country
to
choose
from,
while
repeat
buyers
had
970
available
DPA
programs.

“The
confluence
of
rising
home
prices,
elevated
interest
rates
and
inflation
have
increased
the
pressure
on
consumer
wallets,
and
lenders
are
responding
by
making
it
easier
for
homeowners
to
use
digital
resources
to
tap
into
their
home
equity
or
identify
affordable
home
lending
alternatives,”
Beth
Robertson,
managing
director
of
Keynova
Group,
said
in
a
statement.

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