Chase Home Lending is once again offering a home equity line of credit, five years after hitting pause on the product early in the COVID-19 pandemic.
The bank is looking to capitalize on record-high home values, according to Digital Channel Executive Erik Schmitt. By contrast, in 2020, it was reacting to market uncertainty, alongside peers Wells Fargo and Bank of America.
Wells “temporarily” stopped offering them and has yet to resume the business, and Bank of America continued to offer HELOCs, but tightened its credit standards for a time, according to Bloomberg.
“As home valuations reach historic highs, homeowners are looking for more options to tap into their home’s equity. We’re proud to offer customers the ability to secure a HELOC through Chase,” Schmitt said in a prepared statement Monday.
“Whether it’s to fund a home renovation, debt consolidation or another financial goal, our HELOC product allows customers to meet an immediate cash need without compromising their existing interest rate,” he said.
Borrowers hit $17.8 trillion in total equity in the second quarter, according to an Intercontinental Exchange Mortgage report this month, including $11.6 trillion in equity that can be accessed while maintaining a 20% cushion.
“Roughly 48 million mortgage holders had tappable equity, with the average homeowner holding $213,000 in accessible value,” according to the report.
Nearly half of mortgaged residential properties are equity rich, meaning homeowners owe less than half of their home’s value, according to real estate data company ATTOM.
Chase HELOC customers can access up to 80% of their home’s value without changing their current mortgage rate, according to a press release. If they draw at least 85% of their available line of credit, they can receive it in a lump sum, and the remaining credit will be available for three years.
For repayment, borrowers can make interest-only payments for the first 10 years of their loans, and then have 20 years to repay the principal and interest balance.
Chase HELOCs are available nationwide, excluding Texas.
