The expansion aims to provide more ways for borrowers to lower their monthly payments without impacting their current mortgage rate, with loanDepot citing Realtor.com data showing that 75% of existing mortgages carry rates below 5%.
“Homeowners today enjoy unprecedented levels of equity, and by continuing to expand our home equity lending options, we’re giving them the flexibility they need to find the best solution for their circumstances,” loanDepot president Jeff Walsh said in a statement.
“We are a fully integrated one-stop-shop for all things home equity that helps support our customers’ entire homeownership journey and provides more options to help achieve their financial goals.”
For homeowners, who are collectively carrying a record $35 trillion in home equity, the equityFREEDOM application and loanDepot’s other home equity products allow them to borrow up to $400,000 based on their credit profile and combined loan-to-value ratio (CLTV).
The products feature no prepayment penalties and may not require new appraisals in many cases, according to the company’s announcement.
loanDepot’s home equity loan lets customers access the equity in their homes in a lump sum in one of three, fully amortizing loan terms. Its HELOC products offer flexible terms including a three-year draw period and, in most states, a 10-year, interest-only payment period followed by a 20-year amortizing repayment term.
