HELOCs

Homeowners can tap into more home equity than ever before, but deciding between a home equity line of credit and cash out refinance mortgage has gotten more complicated following recently passed tax reforms.

They aren't creating new products, but some lenders are advising cash-strapped customers in high-tax states to tap home equity or other credit lines to prepay property taxes before the new tax law kicks in.

Any decline in home equity balances could be offset by higher demand for other types of consumer loans. The worry is that only borrowers with blemished credit will take out home equity loans, increasing banks’ risk.

Homeowners with mortgages have collectively seen their equity increase 11.8% year-over-year in the third quarter, according to CoreLogic.

The vast majority of consumers with a home equity line of credit said they are considering using it to pay for planned home renovations this winter.

There were 1.4 million fewer properties seriously underwater in the third quarter, marking the largest year-over-year drop since the second quarter of 2015, according to Attom Data Solutions.

Recent research into customer preferences regarding home equity lending reveals that banks need to better engage with their customers to understand their needs and expectations, and then guide them to optimized HELOC product offerings that precisely meet their needs.

Home equity lines could double over the next six years. Some banks are actively pursuing the consumer credit opportunity, whereas many still feel stung by the housing crisis, unimpressed by home equity’s comeback so far or fearful of nonbank competition and fraud.

One of the biggest challenges surrounding the ballot initiatives is voter turnout, which is often just 10 percent of registered voters in elections the year after a presidential contest.

The forecast for total originations of home equity lines of credit over the next five years is almost twice as high as the five-year total through 2017.