LoanDepot has expanded its equityFREEDOM portfolio with 10- and 30-year home equity loan terms.
The expansion means even more homeowners will be able to tap into their most important source of funding: home equity, the company says in a release.
The expansion adds 10- and 30-year fixed-term options to the company’s existing 20-year fixed-rate home equity loan, complementing its first- and second-lien home equity lines of credit (HELOCs).
With 75% of existing mortgages carrying rates below 5%, homeowners are reluctant to sacrifice their current mortgage to move or refinance. These home equity loan term options provide additional ways for homeowners to lower borrowing costs without affecting their current mortgage rate.
“Homeowners today enjoy unprecedented levels of equity, and by continuing to expand our home equity lending options, we’re giving them the flexibility they need to find the best solution for their circumstances,” says Jeff Walsh, president of loanDepot, in a release. “We are a fully integrated one-stop-shop for all things home equity that helps support our customers’ entire homeownership journey and provides more options to help achieve their financial goals.”
American homeowners, who are carrying a record $35 trillion in home equity, can use their home equity wisely for large expenses such as home renovations, college tuition, or to consolidate high interest credit card debt. Access to home equity is one of the most significant benefits of homeownership, as it can lower the cost of borrowing for large expenses. And, in many cases, the interest may be tax deductible.4
The equityFREEDOM application takes just minutes, the company says, and lets customers access the equity in a lump sum in one of three, fully amortizing loan terms while the HELOC offers flexible terms including a three-year draw period, and, in most states, a 10-year interest-only payment period followed by a 20-year amortizing repayment term.
Each product allows homeowners to borrow up to $400,000, based on their credit profile and their home’s combined loan-to-value ratio (CLTV).
There are no prepayment penalties and, in many cases, borrowers may not need a new home appraisal.
Photo: Scott Graham