Loans in the age of coronavirus has certainly been a whole different experience for both credit unions and consumers. The sudden shift to digital platforms and massive unemployment are two factors that have changed how consumers apply for loans and their priorities in an incredibly short amount of time. In terms of loans that consumers are applying for, there has been a huge demand for mortgage refinancing and home equity loans.
According to a research study from Freddie Mac, mortgage refinancing activity increased drastically at the end of the first quarter of 2020, just after the Fed dropped mortgage rates to historic lows in March of this year. Throughout the early months of the crisis, growth remained steady. The need for extra money while the economy is still in rough spot has been a driving factor for this sharp growth. Plus, Americans are spending a lot more time at home, highlighting all the home renovation projects they’ve been wanting and needing to do. As the U.S deals with the sudden spike in coronavirus cases, the need to refinance may very well continue.
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Homeowners are also seeking extra cash through home equity loans and lines of credit. American consumers had $6.2 trillion dollars of tappable equity in the last quarter of 2019. About one in four Americans were considered “equity-rich” in Q1, according to an article from The Washington Post. However, with many people still out of work, it has become much harder for consumers to get a home equity loan. In fact, there are financial institutions that are simply not accepting applications for loans at all.
With all of this current demand for refinancing, home equity loans and HELOCs, your bank or credit union can reach out to those who need them the most with the help of The Loan Lead Generator! Click here to learn more on how you can use social media to reach out to potential borrowers.