Home Equity Loan Pricing

Each time you add value to an exchange with customers, you increase their loyalty and your chances of working with them across their entire financial lifecycle. Thank your existing customers—and attract new ones—by providing the right offer at the right time to help borrowers achieve new dreams and milestones, which includes home equity loans.

As the world looks to sustain the recent focus on “work remotely” options for the longer term, people are spending nearly all of their time at home. Existing spaces are now multi-tasking to meet both personal and professional needs. And many people are realizing what they have may not be able to meet those needs.
With an anticipated increase in both mortgage loan applications, lenders should also be prepared to put additional focus on how to improve their current home equity loan practices. This is one area of a bank’s portfolio that has the potential to generate critical revenue—IF they are willing and able to invest in adding optimization capabilities to their strategy and execution. Because if you’re not putting the right offer into the right hands at the right time, one of your competitors will be.

Today’s savvy borrowers know that traditional risk-based pricing models used by banks over the last few decades have often times only benefited the banks. It was a one-way street, where customers had less insight into how financial institutions operated, meaning less influence over the way transactions were completed.

Times have changed. And the multi-generational pool of potential borrowers are demanding more transparency and mutually beneficial interactions with both traditional banks and new competing fintechs. They want to know that they’re getting the best possible offer with each interaction. One that’s customized for their specific wants and needs at that point in their life.

The short answer is: They’ll either lose customers, or lose money. (Or in some cases, both.)

The good news for banks is that they already have a tremendous amount of knowledge about existing customers – and prospective ones as well. Data is now readily available. The question is, are banks using it to bring value to the lending marketplace by implementing a consistent way of gleaning customer behavior insights - and more importantly - acting on those insights?

By leveraging what banks already know about customers’ behavior, they can identify new opportunities to support evolving consumer financial goals in both the short- and long-term.