Don’t Let a Down Market Keep You Down (Part 1/2)

– Taking a More Strategic Approach to Leverage Lending Trends –

Lenders who’ve been around the block a time or two know all about the ups and downs of the mortgage market. And smart lenders, regardless of their level of experience, know that a down market requires a more strategic – and aggressive – approach to generate business. In this two-part blog series, we’ll look at two opportunities for growth – home equity lending and reverse mortgages – and why lenders should be aggressively tackling both. Let’s start with home equity lending.

Sitting on a Gold Mine

Home equity among U.S. homeowners is at an all-time high. According to data from CoreLogic, the average U.S. homeowner has more than $274,000 in equity. In total, by the end of 2023, industry estimates forecast that Americans will have roughly $18 trillion in tappable home equity. That’s a lot of dough available to a lot of folks for everything from home improvement and expansion to big-ticket items to weddings, college tuition, and more. And you can bet that homeowners will continue to leverage their own personal gold mine of tapping equity. TransUnion forecasts that home equity lending will climb to 3.7 million units in 2023 — a year-over-year increase of 24%.

And given the still-steady home price appreciation, it doesn’t look like home equity growth will slow down any time soon. In addition, higher mortgage rates, tight housing inventory, and the fact that millions of homeowners have interest rates between 2% and 4% will keep many homeowners staying put in their current home for some time to come.

Maximizing Profits on Low-Margin Originations

While the home equity lending market is poised to yield significant fruit overall, profit margins on individual loans are much lower than for a first mortgage. As a result, it’s even more important to ensure originations are efficient, in terms of costs, talent and technology. In order to maximize bottom-line revenue on home equity lending – whether for home equity loans (HELs) or home equity lines of credit (HELOCs) – lenders need to leverage the latest technology so that their talent is productive and efficient (not to mention happy in their jobs).

If you’re an originator looking to tap the home equity market, the current down cycle offers a great opportunity to improve your mortgage originations process, bringing in advanced technology that won’t break your budget but will revolutionize how your team gets things done. And with low-margin home equity loans, that’s even more critically important. Calyx offers one-stop shopping for complete mortgage origination, from lead capture to point of sale. Send it to a lender of your choice and let them handle the closing process.

The Zenly platform from Calyx lets you originate loans from anywhere on any device with a cloud-based, dynamic solution that saves money, time, and effort. The built-in point of sale lets you easily collect borrower information and streamline the closing process with eSign and easy document upload features. All this adds up to streamlined, efficient operations that will make home equity lending a breeze for both originators and borrowers.

Find out more about the affordable, one-stop Zenly solution that keeps the down market from keeping you down. Click here to learn more.

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