February 26th, 2019
ATTOM Data Solutions recently came out with their Home Equity & Underwater Report, which showed that in Q4 of last year, over 14.5 million US properties were considered “rich” with equity, meaning they have loans that are 50% or less of the estimated market value of the home. These equity-rich properties make up 25.6% of all mortgaged properties in the country, which is a substantial number. On the flip side, over 5 millions properties were found to be underwater, which is defined as having loans with balances at least 25% higher than the estimated value of the home. However, to put that into perspective, those homes make up 8.8% of all mortgaged properties, which is actually down from last year’s total of 9.3%.
The takeaway: Tappable equity is up, and so is household debt. Rates are at their lowest levels in a while, and while Rate & Term refis are a dying breed, now is the perfect time for loan officers to be providing cash-out options to help people get out of debt and meet their financial goals, whether that be retirement, college, investments, so on and so forth. Loan officers need to be creative when preparing and presenting options to their borrowers, and they need to know the full picture of each customer so they can leverage equity to meet the borrower’s financial needs and wants.