CNBC's Diana Olick recently published a piece entitled "Home equity loans set to soar along with home prices", where she sought to investigate how these types of loan products, otherwise referred to as HELOC's, can come into play in today's market. As part of her research, Diana reached out me to discuss my views on their potential popularity and application for prospective homebuyers. If you'd like to read the article in full and my contribution to her research, you can follow the link embedded in this blog. (https://www.cnbc.com/2017/10/24/home-equity-loans-set-to-soar-along-with-home-prices.html)

In today's market of rising home values, HELOC's pose a very interesting opportunity for a sizeable portion of the homebuyer market. For some buyers looking to purchase in the $500k+ price range, we've found that in a growing number of cases, these homebuyers have the ability to qualify based on strong credit scores and income ratios, but may lack the necessary down payment requirements to qualify for a traditional jumbo loan. In these scenarios, a HELOC could make for an excellent opportunity to help that homebuyer get into their dream home.

HELOC's are set up as a second mortgage will account for the difference in dollar amount for bringing the first mortgage into conventional loan limit range, a range within our county of $424,100, and with payments set up as a variable rate interest only program.

The one thing we need to point out, and which we shared with Diana in her article as well, is that in today's rising rate market these types of products are best suited for homebuyers with the financial strength to be able to pay off these loans in a reasonable amount of time. HELOC products are not ideal on a long-term basis, but can certainly be beneficial for the homeowners short-term interests. Keeping in mind that HELOC's are variable rate loan products whose interest rates are based off the U.S. Prime rate – a rate that has risen three-fourths of a percent in the last year and expected to continue this trend for the foreseeable future.

To sum it up, HELOC's are a great way for homebuyers with strong credit profiles and qualifying income ratios to get into their dream home without the standard down payment. However, to understand whether or if a HELOC would be beneficial to your client, speaking with a trusted mortgage advisor, such as myself, would be the best direction to go.

If you are currently the listing agent on homes in the $500k plus range, or a buying agent working with a client shopping in that price point, we would be happy to help advise on the best course of action. As our real estate partner we are here to support you – and we mean that wholeheartedly – so even if this means assessing an offer on one of your listings for which we will not be involved in the transaction, we are more than happy to do so. Please reach out to me at 561-864-2458 during the hours of 8am-9pm 7 days a week.

Now, for those of you who joined us for our first ever Heavy Hitters series of events last week, we just want to remind you that the raffle drawing for your choice of either two lower level Miami Heat tickets or a day at the Boca Resort's Beach Club will be this Wednesday during our next episode. If you submitted your survey to us, we will be selecting a winner and announcing it during the show. If you hear your named called, please call me directly at 561-864-2458 to claim your gift within 24 hours of the announcement.

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 I appreciate you joining me today, hopefully you can find a way to apply your shot into today, until tomorrow, have a better day today than yesterday.

The views of this blog, "Your Morning Shot" podcast, and on this site in general are solely those of the authors, Matt Weaver (NMLS-175651) and Zack Lewis, and do not express the views or opinions of Finance of America Mortgage.