loanDepot Expands equityFREEDOM Portfolio with New 10- and 30-Year Home Equity Loan Options
loanDepot, Inc. (“LDI” or “Company”) (NYSE: LDI), a leading provider of products and services that support the homeownership journey, has announced an expansion of its equityFREEDOM portfolio. This strategic move is designed to provide nearly 50 million American homeowners with greater access to their tappable home equity, reinforcing loanDepot’s commitment to making home equity lending more accessible and flexible.
The expansion introduces new 10- and 30-year fixed-term options to the company’s existing 20-year fixed-rate home equity loan. These additions complement loanDepot’s first- and second-lien home equity lines of credit (HELOCs), providing homeowners with multiple pathways to leverage their home equity without disturbing their current mortgage rates. Given that approximately 75 percent of existing mortgages carry interest rates below five percent, many homeowners are hesitant to refinance or move. These new loan term options offer an alternative approach, allowing homeowners to tap into their equity while keeping their existing mortgage intact.
Home Equity: A Powerful Financial Tool
The equityFREEDOM portfolio expansion comes at a time when American homeowners collectively hold a record $35 trillion in home equity. This presents a significant financial resource that can be utilized for various purposes, such as funding home renovations, paying for higher education, or consolidating high-interest debt. Unlike other borrowing options, home equity loans often provide lower interest rates, and in many cases, the interest may be tax-deductible. This makes them an attractive financial instrument for homeowners looking to manage expenses more efficiently.
Jeff Walsh, President of loanDepot, emphasized the importance of expanding home equity lending options, stating, “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. 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.”
The Benefits of Home Equity Loans
Home equity loans and HELOCs are valuable financial tools that allow homeowners to utilize their property’s value without having to sell or refinance at potentially higher mortgage rates. loanDepot’s expanded equityFREEDOM portfolio ensures that homeowners have a broad range of options to choose from, depending on their financial needs and repayment preferences.
The key benefits of loanDepot’s home equity solutions include:
- Multiple Loan Term Options: Homeowners can now choose between 10-, 20-, and 30-year fixed-term home equity loans, offering flexibility in repayment schedules and financial planning.
- High Borrowing Limits: Qualified homeowners can borrow up to $400,000, based on their credit profile and combined loan-to-value ratio (CLTV).
- No Prepayment Penalties: Borrowers have the freedom to repay their loans ahead of schedule without incurring additional costs.
- Fast and Simple Application Process: The equityFREEDOM application takes just minutes to complete, providing quick access to funds when needed.
- Tax Advantages: In many cases, the interest on home equity loans may be tax-deductible, further enhancing their financial benefits.
- Flexible HELOC Terms: The HELOC option includes a three-year draw period, and in most states, a 10-year interest-only payment period followed by a 20-year fully amortizing repayment term.
Understanding Home Equity Lending
Home equity lending has become an increasingly popular way for homeowners to access the financial benefits of their property without selling. It allows them to convert their home equity into liquid funds, which can be used for significant expenses such as home improvements, medical bills, or education costs. Home equity loans provide a lump sum amount with fixed interest rates and predictable monthly payments, making them an attractive option for those seeking financial stability.
On the other hand, a HELOC operates more like a credit line, offering flexibility to borrow as needed. Homeowners can access funds during the draw period and make interest-only payments before transitioning into a repayment phase. This flexibility makes HELOCs particularly useful for ongoing expenses, such as tuition payments or phased home improvement projects.
The Growing Demand for Home Equity Products
As interest rates have risen in recent years, refinancing existing mortgages has become a less attractive option for many homeowners. Those who secured low mortgage rates before the recent hikes are reluctant to refinance, as doing so would likely result in higher interest costs. This has led to a growing demand for home equity products that allow homeowners to access cash without altering their existing mortgage terms.
LoanDepot’s expansion of the equityFREEDOM portfolio aligns with this demand, providing tailored solutions that empower homeowners to take advantage of their built-up equity. By offering different term lengths and flexible repayment structures, the company is addressing the evolving financial needs of American homeowners.
A Seamless and Customer-Centric Experience
LoanDepot is committed to making the borrowing process as seamless as possible. The company’s user-friendly application process ensures that homeowners can quickly access the funds they need without unnecessary delays. The approval process considers key factors such as creditworthiness, loan-to-value ratio, and income stability, ensuring responsible lending practices.
Moreover, loanDepot offers personalized guidance to help customers navigate their home equity options. Whether a homeowner is looking to consolidate debt, finance home improvements, or cover major life expenses, loanDepot’s team of experts is available to assist in selecting the best financial solution.
The Future of Home Equity Lending
The home equity lending market is expected to continue growing as more homeowners recognize the benefits of leveraging their property’s value. As housing prices remain strong, homeowners will have increased opportunities to tap into their equity for financial planning purposes. Companies like loanDepot are at the forefront of this shift, providing innovative products that cater to the changing needs of borrowers.
In the coming years, we can expect further advancements in home equity lending, including digital solutions that streamline the application and approval process. loanDepot is well-positioned to lead this evolution, with a focus on customer-centric services, technological innovation, and a comprehensive suite of home equity products.
