Tuesday, April 17, 2018

With the number of American consumers expected to take out a home equity line of credit (HELOC) projected to double to 10 million over the next five years, lenders need to step up their digital offerings, say the results of the the J.D. Power 2018 U.S. Home Equity Line of Credit Satisfaction Study.

This new study takes a look at customer perceptions of the HELOC process, evaluating various factors that influence consumer choice when choosing a lender to work with, such as: offerings and terms; application/approval process; closing; interaction with the lender; billing and payment; and post-closing and usage.

According to J.D. Power execs, many of the above steps are increasingly happening through digital and mobile channels, and as millennial homeownership rates increase and home values continue to rise, meeting the demands of this digitally-native demographic will become increasingly important.

Here are some interesting highlights from the survey:

- Established relationships with lenders still play a key role, with 66 percent of all borrowers gathering information about a HELOC in person; however, when it comes to younger borrowers, 59 percent of millennials gather information online via desktop computers and 50 percent of millennials gather information online via smartphones or tablets.
- Few HELOC borrowers are actively approached by a lender, but rather, 88 percent begin searching for a HELOC on their own. This could point to the fact that lender marketing efforts are having little influence on consumers. Millennials are even less likely to hear from a lender, with 94 percent initiating the HELOC product search themselves.
- More than half (55 percent) of customers considered at least one other lender during their shopping process, and that number jumped when it came to millennials, of which 80 percent of HELOC borrowers considered at least one other lender.
- Understandably, 64 percent of all borrowers express some type of concern about obtaining a HELOC product, with millennial customers showing the highest levels of concern. Only 13 percent say they had no concerns. Key concerns include the variable nature of the loan and overextending themselves.

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