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Increasing Trend in HELOC Loan Origination Volume Since 2008

By on October 13, 2014 in Mortgage Programs

RealtyTrac, the nation’s leading provider of comprehensive housing data and analytic for the real estate and financial services industries recently released a trend report on the total volume for HELOC loan originations. The first-ever HELOCs volume report shows a sudden increase in trend since 2009.


Since June of 2009, the total volume in Home Equity Line of Credit (HELOCs) in the nation has increased. Measured over a course of 12 months and ending in June 2014, there were a total of 797,865 HELOC loan originations, which is the highest in volume in over 6 years.

Interested in a HELOC? Speak with a HELOCs professional today to see if you are eligible.

This total in HELOC loan origination accounts for 15.4 percent of all loan originations in the U.S. during the first 8 months and is the highest its been since 2008.

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In an informing statement made by the Vice President of RealtyTrac, Daren Blomquist, there are an estimated 10 million homeowners nationwide and a representation of 20 percent among all mortgage borrowers have at least 50 percent of equity in their homes today according to RealtyTrac’s findings.

Additionally, the total percentage of homeowners with serious negative equity has declined from a reported 29 percent in 2012 to 17 percent in the second quarter of 2014.

To learn more about HELOCs and if it is right for your, click here to speak with a loan professional today.

The sudden increase in today’s HELOCs volume may be an indication that the homeowners who were hit by the housing crisis resulting in loss of equity are now regaining confidence of the housing recovery.

“The rise in HELOCs also reflects a natural evolution for a lending industry looking for products they can offer to homeowners who have already refinanced their first position loan into a low fixed rate,” Blomquist points out. “A HELOC enables homeowners to leverage additional equity they may have gained since refinancing while still preserving the rock-bottom interest rate on their first position loan.”

HELOCs Volume Still Remains 76 Percent Below 2005-2006

Despite the increase in trends, the HELOCs origination volume is still below 2005-2006 peaks when compared with the the total origination of 3,299,007 in 2006, and 24.7 percent in 2005.

U.S. Metro Areas with Highest HELOC Origination Year-Over-Year Increase

After a top 50 metropolitan statistical area survey conducted by RealtyTrac, 49 of the statistical areas had a year-over-year increase in HELOC originations throughout the 12 month period ending in June 2014.

RealtyTrac_10_09_14b_0

Metro areas with highest change increase were Riverside – San Bernardino, CA (87.7 percent increase), Las Vegas, NV (85.1 percent increase), Cincinnati (81 percent increase), Sacramento (65.1 percent increase), and Phoneix (60.1 percent increase).

What is a HELOC?

A home equity line of credit, often referred to as HELOC for short is a type of home loan that allows for borrowers to open up a line of credit by using their home as collateral.

The loan amount with a HELOC is usually pre-determined by the mortgage lender as oppose to a traditional mortgage loan where the amount borrowed is the total amount that is financed.

Advantages of HELOCs

Despite the negative talk in regards to a home equity line of credit, there are several common advantages, such as:

  • Most cases, it has a lower rate than a fixed loan
  • Comes with an interest-only option
  • There are usually no prepay required
  • The ability to withdraw what they want, and when they want
  • comes with lower fees
Would you like to take advantage of HELOC benefits? Mortgage Home Base has several mortgage loan professionals that may be able to help.

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About the Author

About the Author: Jessica Lucas is the managing editor for Mortgage Home Base, a top real estate finance blog dedicated to helping borrowers and home buyers understand the home loan process. Follow Jessica on Google +, and share your comments here. .
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