Home Equity Lines of Credit on the Rise 

As interest rates continue to rise, many homeowners are looking for ways to tap into the equity they have in their homes. In the second quarter of this year, Americans took out $66 billion in home equity lines of credit (HELOCs), a 40% increase from last year. This is the largest amount borrowed in HELOCs in almost three years, according to data from real estate analytics firm Attom Data Solutions. 

With rates expected to rise even more in the coming years, many homeowners are choosing to borrow against the value of their home now before it becomes too expensive to do so. Not only that, but banks are more willing to lend money for HELOCs than they were just a few years ago. If your customers are thinking about taking out a HELOC, now is a good time to do so. Here’s what they need to know: 

How HELOCs Work 

A home equity line of credit is essentially a loan that uses your home as collateral. The amount you’re able to borrow will depend on factors such as your credit score, income, and the value of your home minus any outstanding mortgage balance. You can generally borrow up to 85% of your home’s value, though some lenders may limit this amount to 70%. 

Unlike a traditional loan, a HELOC allows you to borrow money as you need it, up to your credit limit. This can be helpful if you’re making repairs or improvements to your home and need funds over an extended period of time. You’ll only be charged interest on the portion of the loan that you use, and you won’t have to make payments on the principal until the end of the draw period ( typically 10 years). At that point, you’ll enter the repayment period, which will last for another 20 years or so. Keep in mind that during the repayment period, you’ll be required to make both principal and interest payments each month.  

Why Get a HELOC? 

There are several reasons why getting a HELOC may be a good idea for most consumers. If you have a low interest rate on your current mortgage, consolidating your debt with a HELOC could help you save money on interest payments. Or if you need access to cash for an emergency expense or large purchase, a HELOC can give you the flexibility to do so without having to sell any assets. Just be sure that you only borrow what you need and that you’re able to make timely payments on your loan; otherwise, you could end up losing your home.  

If you’re thinking about taking out a home equity line of credit (HELOC), now may be a good time to do so. With interest rates on the rise, many homeowners are looking for ways to tap into their equity while rates are still relatively low. And thanks to increased lending by banks, it’s easier than ever to get approved for a HELOC. Just make sure that you understand how these loans work and only borrow what you can afford to repay.  

Altair can help find the right customers for a HELOC 

Altair is best positioned to identify current customers and new customers that would benefit from a HELOC or are in the market for a HELOC. With our advanced targeting capabilities, we can help your bank increase your share of wallet and become the primary banking partner for your clients. Altair Data offers a turnkey, bundled HELOC solution for your bank’s next marketing campaign. The entire package includes:  

  1. Data strategy and data sourcing 
  2. Direct mail production and fulfillment 
  3. Email deployment services 
  4. Measurement and reporting  

Whether you want the complete bundled HELOC solution or just the data, we can customize what you need to help you sell your next high value product and take advantage of the current market. Altair can help you proactively offer the right solution for customer needs. Learn more by calling our sales team at 1 (615) 468-6800.