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The outlook for 2017 looks good for home repair and remodeling. Both the Joint Center for Housing Studies at Harvard and the National Association of Homebuilders are forecasting a strong 2017 home repair/remodeling market. This may also open some new doors for home financing to mortgage lenders.
Although the home purchase market is still projected to improve in 2017, with rising rates and a decline in refinancing activity, some lenders may be looking for other business channels to improve or maintain production levels. Home improvement and remodeling loans offer those opportunities.
Some homeowners, who have already refinanced, may decide to stay in their home a little longer. If their home needs a little sprucing up, rather than pay cash or the high rates offered by remodelers, they may choose to take a HELOC based on current equity. Lenders should also have those products in their arsenal.
Others may see this as a chance to purchase a new home at a lower price because it is in need of some repairs. These buyers can be serviced using FHA’s 203K program or similar home remodeling programs offered by Fannie and Freddie. These same programs may also be used by existing homeowners as a refinance to pay off their current loans and get capital for desired improvements when considering major renovations.
New home buyers may want to do some updates to recently purchased home and may want to take secure a line of credit. While other homeowners may consider a line to pay off other higher interest rate debts like credit cards and student loans.
There are plenty of opportunities for mortgage lending other than the standard 30-year fixed mortgage, as long as lenders offer the products and know how to sell and close them.
You just never know the origin of your next deal. When it comes along, you need to have the products, systems, and trained staff available to handle it.
- Do you offer the products to handle home remodeling financing?
- Are your originators knowledgeable enough to originate such products?
- Do you have the marketing and contacts to get this business?
- Do you have outlets for HELOCs?
The game has changed. Play different.
