Ready Rate rolls out new home equity loan product
The new fixed-rate home equity loan is coming to market as tappable home equity nears its 2022 peak. .
[Credit to Ready Rate, Dec 11, 2023 ]
“Ready Rate’s Real Estate partners can now offer their clients a home equity loan as a second lien solution to access more cash while still preserving the low interest rate of their first mortgage,” the company said.
Understanding Home Equity Loans
A home equity loan — also known as a second mortgage — enables a homeowner to borrow money by leveraging equity in a home. The borrower receives the loan amount in one lump sum, which is paid back in monthly payments, typically for a term of up to 30 years.
Ready Rate is now licensed to originate first and second mortgages in Florida and Michigan. This new product is eligible only for primary residences with fixed-rate term structures of 10, 15, 20, or 30 years. The minimum loan amount is $50,000, and the maximum is $500,000 with an 85% loan-to-value (LTV).
Specifics You Should Know
Ready Rate’s home equity loan comes as U.S. homeowners sit on some $16.4 trillion of home equity in the third quarter of 2023. Tappable equity – the amount that can be accessed after retaining a 20% equity stake – stood at $10.6 trillion, nearing the peak in 2022, according to ICE Mortgage Technology‘s mortgage monitor report.
While cash-out refinancing was a popular way to access accumulated home equity when mortgage rates were lower, that’s a lot less appealing with rates over 7%.
Even with higher levels of home equity, borrowers are more likely to take out a second-lien mortgage rather than lose a low rate on their first mortgage through a cash-out refi.
Need more info or curious how a home equity loan can help your clients? Let’s chat! Please contact your loan officer at Ready Rate or call us at 888-707-1776. We’re here to make the mortgage game a winning one for you and your clients. Ready Rate the easiest way to reach your goals.
By Ready Rate, Updated Dec 11, 2023
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For information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. subject to credit approval.
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