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Digital homeownership company Better.com on Thursday announced a record 400% growth in its home equity line of credit (HELOC) and home equity loan businesses.
In a press release, the company announced that its HELOC business channel increased its revenue from $15 million per month in January 2024 to $60 million per month by October 2024.
“If you look at any of the industry’s measures of origination growth, particularly with respect to HELOC, I think we’re growing faster than everybody else,” Better founder and CEO Vishal Garg said in an interview with HousingWire.
Better’s HELOC product launched in beta mode in late 2023 within a span of 90 days, Garg said.
“Leveraging all the digital infrastructure that we had built for refinance [during the COVID-19 pandemic], consumers who had refinanced with Better before were looking for a cash-out refinance, but we didn’t have a product to give them for home equity. So, that’s why we launched the HELOC product,” Garg explained.
“For our one-day HELOC product, we go from an application to a fully underwritten approval in less than eight hours for a HELOC,” he added. “For a consumer who wants to do a home renovation, a consumer who wants to consolidate debts, or a consumer who wants to take cash out to pay for tuition for their kids, our product serves all of those use cases.”
How is it so fast? Garg explained that Better utilized its marketplace lending model that includes 32 different investors across the mortgage landscape — from real estate investment trusts and insurance companies to hedge funds, major correspondent lenders and the government-sponsored enterprises Fannie Mae and Freddie Mac.
“We’ve mimicked that for our HELOC product, so we’re not just one takeout,” he said. “We have over four takeouts for different products and different underwriting criteria, so we’re underwriting the consumer, not for one straight pathway. We’re underwriting them for four-plus investors, and I think that allows us to have a much higher approval rate than the other HELOC providers.”
Garg said that Better’s $60 million in HELOC originations in October 2024 will repeat itself throughout 2025.
“What’s unique about our solution there is, we’re not asking them to adopt our technology,” he said about earning customers. “We think this is the HELOC of the future because it’s a true marketplace HELOC, not a one-size-fits-all underwriting HELOC, which is what a lot of our competitors have.”
Recent data from ATTOM revealed that 47.7% of mortgaged residential properties in the U.S. were considered “equity rich” in Q4 2024, meaning that the underlying mortgage debt did not exceed 50% of the home’s market value.
While that measure was down slightly from 48.3% in Q3 2024, it was still up from 46.1% in Q4 2023 and remained at historically high levels.The 47.7% figure is far above the 26.5% level recorded in early 2020, ATTOM reported.
