No matter what the status of the market is, it is always a good time for credit unions to expand their offerings to include home equity loans to create a balanced portfolio of different types of loans. The lack of housing stock and high prices for the homes that are on the market have decreased home sales, and this makes home equity loans even more attractive to homeowners.
Credit unions can tap into that market of homeowners who are turning to option B to get the home they want – a home equity loan for renovations. The key for credit unions to make this a successful endeavor is using technology to streamline the process.
Many lenders that offer mortgages, including credit unions, have used the process for conforming and first loans on their non-conforming business, which includes home equity lending. They have used this method, which brings unnecessary steps to the process, because that is the only way they know how to process loans. Adding the home equity line of business does require a credit union to invest in a new loan origination system.