Responding to Dynamic Market Conditions, Home Lenders Enhance the Digital Experience for Home Equity and Offer Sophisticated Home Lending Portals
Wilmington, Del., Sept. 4, 2024 – Keynova Group, the leading competitive intelligence source for digital financial services, today announced the results of its 2024 Mortgage-Home Equity Scorecard, a consumer experience benchmark evaluating the top 12 U.S.-based mortgage and home equity lenders. Bank of America again won first place in the annual Scorecard, which assesses the digital channels of leading bank and non-bank lenders used by consumers to evaluate and apply for a mortgage, refinancing, or for home equity needs.
The 2024 Mortgage-Home Equity Scorecard reveals key industry trends seen in lenders’ digital offerings including expanded home equity options, additional information about home lending programs that can help borrowers address financial challenges, and the continuing development of integrated digital home lending portals.
“The confluence of rising home prices, elevated interest rates and inflation have increased the pressure on consumer wallets, and lenders are responding by making it easier for homeowners to use digital resources to tap into their home equity or identify affordable home lending alternatives,” said Beth Robertson, managing director, Keynova Group. “Home lenders’ sophisticated portals also add a level of ease and transparency to digital loan origination that’s not available in offline processes.”
Key Findings:
As Home Sales Stall, Home Equity Lending Stands to Gain Momentum
While high interest rates and home prices have slowed home sales, recent Federal Reserve data shows that homeowners are sitting on nearly $33 trillion in home equity value that could be used for home improvements or to consolidate high-interest debt. With cash-out refinancing currently a less enticing option for most borrowers, banks and non-banks are tweaking home equity line of credit (HELOC) and loan products. Among the 75% of Scorecard lenders offering home equity lending, nearly all provide a digital application and close to half (44%) incorporate a soft credit pull in advance of full underwriting so that applicants can know immediately if they are likely to qualify. One-quarter of lenders offer accelerated closing options including two lenders advertising home equity funding in as little as one week. Additionally, while HELOCs are traditionally a variable rate product, 56% of home equity lenders enable customers to lock in a rate online when interest rates are rising, and 33% promote the ability to digitally lock or unlock a fixed rate, enabling borrowers to return to a variable rate if rates are declining. To minimize near-term repayment expenses, close to 20% of lenders offer the option for qualified customers to make interest-only payments during the HELOC draw period.
Lenders Expand Access to Information to Address Inflationary Pressures
With inflation-related pressures increasing financial burdens for many consumers, lenders are expanding digital access to information about alternatives such as down payment assistance for new buyers or loan modifications for existing homeowners experiencing financial pressure. Lenders have expanded their digital content for prospective homeowners by building out details about low down payment options, including half offering custom low down payment products and 42% supplying information on grants and other resources to support affordable home ownership. For existing homeowners, 83% of lenders now offer online content showcasing how to start the process for a loan modification, repayment plan or alternative financial assistance. And 42% of lenders support a fully online process through which customers can apply for and track loan modification requests.
Comprehensive Home Lending Portals Improve Digital Experience
Years of work on new approaches to digital loan origination that extend beyond online versions of offline application processes have culminated in today’s full-featured home lending portals offering borrowers a sophisticated and integrated experience. Today 92% of Scorecard lenders combine digital applications and status tracking within a single portal, while 33% are creating highly comprehensive digital home lending experiences. Chase MyHome is a best-in-class example, supporting a wide array of features beyond digital applications and loan status tracking, including rate information, calculators, property shopping and home value tools, market trend information, and mortgage servicing in a single credentialed portal. The portal also enables single sign-on access to other Chase accounts the customer owns.
About the Keynova Group Mortgage Home Equity Scorecard
Keynova Group’s annual Mortgage-Home Equity Scorecard, syndicated since 2005, objectively reviews the digital capabilities and user experience at 12 of the top bank and non-bank lenders in the U.S. This includes eight of the largest financial institutions in home lending: Bank of America, Chase, Citi, Citizens, PNC, Truist, U.S. Bank, and Wells Fargo, and four of the largest non-bank home lenders: Freedom Mortgage, loanDepot, Rate, and Rocket Mortgage. For more information, please visit https://www.keynovagroup.com/scorecards/#credit-cards-and-lending.
About Keynova Group
Keynova Group is the nation’s foremost competitive intelligence firm providing trusted benchmarking insights and analysis of consumer and small business digital financial services, including banking, credit card, home lending and insurance. Since 1999, Keynova Group’s Scorecards have served as the go-to source for leading financial services firms to obtain reliable competitive intelligence and actionable insights. The firm’s proven methodology and highly detailed results help its clients maximize the value of their online and mobile channels to deliver a premier experience to customers and prospects.
For more information:
Meggan Manson
Young & Associates, for Keynova Group
301-371-6995
megganm@yapr.com