Lending in rising rate environment: A look at HELOCs

Of course, there’s no such thing as free money, but the historically low interest rates of the past few years have been about as close as most consumers will ever get to the concept. Those low rates meant many consumers decided it was worth a few bucks in closing costs to refinance their higher-rate variable or fixed mortgages into something that would cost them a lot less interest over the life of the loan.

Now, that pesky, interfering Fed has raised its federal funds rate — and interest rates are going along for the ride. Many consumers who might have been in the refi market just a year ago will likely decide they’re better off with the loans they have, rather than taking a chance that rates will continue to rise. When homeowners become wary of rising rates, refi business dries up for financial institutions.

When refinancing business dwindles, and the new mortgage market becomes even more competitive, banks need to find other profitable lending opportunities. Our upcoming webinar, Top Lending Strategies in a Rising Rate Environment, aims to help financial institutions uncover opportunities to help them offset the probable downturn in these areas. You’ll hear from top economist Mark Zandi from Moody’s Analytics, as well as Deluxe’s own Chief Data Scientist Kesna Lawrence as they discuss the changing environment and how FIs strategies should be shifting for success in 2018.

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