HELOCs poised to rise; tappable equity jumps for most homeowners

April 4, 2018 - 2 min read


It looks like HELOCs are about to rise. According to a new survey, nearly half of all homeowners have a Home Equity Line of Credit on their radar, with 42 percent saying they’re somewhat, very or extremely likely to apply for one in the next 18 months.

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HELOCS, home equity jump

Lenders that offer HELOCs are in luck. According to TD Bank’s Spring Home Lending Survey, almost half of homeowners are thinking of taking out a Home Equity Line of Credit in the near future.

It’s no surprise either. Homeowners have more equity to pull from than they have in a while, and according to the survey, 69 percent of homeowners have seen their home equity increase over the last 18 months.

Homeowners see biggest home equity jump in 4 years

But the downside? Most of those homeowners don’t exactly know what a HELOC is or how to use one.

According to the survey, a whopping 57 percent are only somewhat, not very or not at all confident in their understanding of HELOCs. Another 29 percent didn’t even know they could use HELOCs for non-home related expenses, like college tuition or debt consolidation.

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Considering a HELOC

When it comes to taking out a HELOC, potential borrowers say they’re most concerned with the interest rate they’ll get. Total loan amount, fees and the trustworthiness of the lender also ranked high.

As for why they’d consider a HELOC, it seems most homeowners like the ability to borrow as needed – rather than a set, large amount.

Other homeowners are drawn to the low-interest rates, particularly compared to credit cards and other forms of credit, as well as the HELOC’s ability to help cover home renovations, repairs and upgrades.

2018: The year of HELOCs and cash-out refinances

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Aly J. Yale
Authored By: Aly J. Yale
The Mortgage Reports contributor
Aly J. Yale is a mortgage and real estate writer based in Houston who has contributed to Forbes and worked for organizations such as The Dallas Morning News, PBS, NBC, and Radio Disney.