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Rocket gets into home equity game, joining rival nonbanks

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rocket mortgageIt is the largest lender in the United States.

After receiving a home appraisal, homeowners can access $45,000 to $350,000 of their home’s equity in a 10- or 20-year fixed-rate loan while retaining at least 10% of their home’s equity, Rocket said. said on Monday.

Rocket targets American homeowners with high household debt and credit card balances but strong home equity position.

Rocket Mortgage CEO Bob Walters said: “Our New Home His Equity His Loan Allows Customers To Make Payments More Comfortably And Improve Their Lives.”

US credit card balances were $841 billion in the first quarter, up $71 billion from the same period in 2021. report from Federal Reserve Bank of New YorkAs of the first quarter of this year, the country’s total household debt was $15.8 trillion, $1.7 trillion more than at the end of 2019. federal reserve system estimates that Americans own about $28 trillion in housing wealth.

in the meantime Home price growth expected to slow Over the next few months, home price growth will exceed 5% per annum, making home equity securities an attractive investment for lenders.

last month, Guaranteed rate roll out Digital Home Equity Line of Credit (HELOC) offers its customers a fixed rate and a fixed term of up to 30 years. The homeowner can later withdraw from the 2-year to 5-year line of credit, depending on the term chosen at the current market interest rate. (The Chicago-based lender also debuted an unsecured personal loan product.)

In a home equity loan, the lender pays the borrower a lump sum upfront, and the borrower repays the loan in fixed-rate installments.a Herlockis a variable-rate revolving line of credit that allows borrowers to withdraw as needed, allowing homeowners to access their equity without having to refinance a major mortgage.

Depository banks have dominated home equity lending for years, but volume-hungry nonbank lenders are increasingly targeting the space.

loan depotanother top non-bank plans its launch All-digital HELOC By Q4 2022. The lender’s HELOC product is the first of the mello business unit, launched in March and focused on developing mortgage-adjacent lending products and services.

New Residential Investment Corporation again, herlock productsthe company said in its first-quarter earnings call as part of a strategy to address slowing originations.

“Since more than half of our customer base currently owns at least a 40% stake in their homes, we are targeting the customers we serve and helping homeowners maintain their existing low-interest mortgages. , is launching a new HELOC product that will make existing mortgages available for home equity for home renovations and other occasions,” said Rocket president Baron Silverstein.

shapeJune figures set a new record for the eighth straight month, showing a 300% year-over-year increase, according to the lender focused on HELOC offerings.

data from Inside Mortgage Finance Rocket generated $37.5 billion in loans in the second quarter, down 30.5% from the previous quarter, according to IMF data.

In the first three months of the year, Rocket reported $54 billion in closed loans, down from $75.8 billion in the previous quarter.

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