Accelerated Growth in HELOC Originations
In a recent interview with HousingWire, Better founder and CEO Vishal Garg expressed confidence in the company’s rapid growth in HELOC originations compared to industry benchmarks. Garg highlighted that Better’s HELOC product, launched in beta mode in late 2023, has shown significant acceleration in just 90 days.
Garg attributed this swift growth to Better’s digital infrastructure, initially built for refinancing during the COVID-19 pandemic. The demand for a cash-out refinance led to the development of the HELOC product to cater to consumers seeking home equity solutions.
Better’s one-day HELOC product boasts an efficient process, from application to fully underwritten approval in less than eight hours. This rapid turnaround time caters to various consumer needs, such as home renovations, debt consolidation, and funding education expenses.
Marketplace Lending Model for Enhanced Approval Rates
Garg explained that Better’s marketplace lending model, involving 32 different investors, including industry players like real estate investment trusts, insurance companies, and government-sponsored enterprises like Fannie Mae and Freddie Mac, contributes to higher approval rates than traditional HELOC providers.
Better’s success in HELOC originations, with $60 million in originations in October 2024, is projected to continue throughout 2025. Garg emphasized the customer-centric approach of the marketplace HELOC, tailored to individual consumer needs and preferences.
Market Insights from ATTOM Data
Recent data from ATTOM indicates a significant increase in “equity-rich” properties in the U.S., with 47.7% of mortgaged residential properties falling into this category in Q4 2024. Despite a slight decrease from the previous quarter, this figure remains historically high, reflecting a positive trend in home equity accumulation.
The 47.7% equity-rich level in Q4 2024 represents a substantial rise from earlier years, underscoring the resilience of the housing market in the face of economic challenges. The data from ATTOM reinforces the ongoing importance of home equity as a valuable asset for homeowners.