Is Now a Good Time to Focus on Home Equity Lending?

While Servion Mortgage doesn’t offer home equity loans, part of our commitment to partners is keeping you informed. And right now, we think it’s a good time to inform you that there could be an opportunity for community FIs to have success with home equity loans, also known as HELOCs.

If short- and long-term interest rates rise – and they have slowly crept up so far this fall – home equity loan rates could become attractive when compared to mortgage refinancing. As such, homeowners might be more inclined to do a HELOC than a refinance. So if you have a strategy for HELOCs, you could benefit.

Here are a few HELOC-related points of interest to consider: 

• Many large banks reportedly reduced or even stopped home equity lending during the pandemic. If interest rates rise and you are prepared with a HELOC solution, homeowners could be looking your way.
• Homeowners have record amounts of equity to use. Home prices have skyrocketed and as a result, homeowners collectively gained $1.9 trillion in equity from 2020 to 2021. Many are looking for ways to use that equity for remodeling rather than trying to buy a different house at elevated prices.
• Working from home means renovations. If working from home sticks around, more people might want to use home equity to create a more permanent office that is more comfortable to work from for many years.

Overall, offering HELOCs could help your credit union or community bank gain more business over the coming year, particularly if short- and long-term rates rise. 

Servion Title Offers Home Equity Title Services

While Servion Mortgage does not offer home equity loans, our sister company, Servion Title, does offer home equity title solutions including recording, O&E reports, and more. You can order home equity title through Servion in all 50 states. See the home equity page of our website for more information.