Industry Trends at a Glance:
- Refinance applications are up more than 80% as rates hit their lowest point in 11 months.1
- Refi originations are projected to reach $502B in 2025 and nearly $700B in 2026.2
- Homeowners still hold over $35 trillion in tappable equity3, and while equity fell $374B4 YoY, lenders have an opportunity to capture more of this volume.
- MISMO released the SMART Doc® V3 eHELOC Specification, signaling growing ecosystem readiness for digital home-equity lending.
A Shifting Market Creates Both Opportunity, and Operational Pressure
U.S. homeowners hold almost $35 trillion in equity3—and they’re already tapping into it. While average available equity for homeowners with mortgages fell 2.2% in Q34 , the average homeowner still retains nearly $300K in available equity, presenting lenders with an opportunity to help borrowers access the cash they need through flexible, lower-interest home equity products.
With mortgage rates still above historic lows, most borrowers are reluctant to refinance their first mortgages. Instead, they’re turning to home equity lines of credit (HELOCs) and home equity loans (HELOANs) as cost-effective ways to borrow cash. The latest Household Debt and Credit Report from the Federal Reserve Bank of New York confirms the trend: home equity borrowing, especially via HELOCs, is on the rise.2
For lenders, this shift is a clear opportunity to grow loan volume while meeting evolving borrower needs. Historically, these second mortgages have been portfolio products, limited in part by secondary market transferability. But that’s beginning to change.
In response to growing demand, MISMO released the SMART Doc® V3 eHELOC Specification for public comment. This standard enables verifiable data to travel with the PDF—improving document reliability, consistency, and investor trust of digital HELOC documents. As MBA’s Vice President of Industry Technology Richard Hill explained, this specification will help lenders and investors “gain efficiencies and trust while originating, buying, and servicing HELOCs.”
With borrower demand climbing, industry standards advancing, and investor interest increasing, the time is now to modernize home-equity operations, starting with the closing process.
Understanding HELOCs vs. HELOANs
HELOCs and HELOANs are often referred to as second mortgages, but they serve different needs.
HELOCs work like a credit card secured by home equity. Borrowers can draw from a line of credit as needed, typically over a 10-year period, and repay the balance over time. The available credit replenishes as the borrower pays down their balance, offering flexibility for ongoing or unpredictable expenses.
HELOANs provide a one-time lump sum with a fixed interest rate and structured repayment schedule, making them ideal for planned, larger expenses like home renovations or debt consolidation.
Both products allow homeowners to borrow against their home without impacting their first mortgage, making them increasingly popular in a high-rate environment.
Why Digitizing Home Equity Closings Matters
Despite growing demand, many lenders still close HELOCs and HELOANs using manual, paper-heavy processes that slow down turn times, create operational risk, and leave borrowers frustrated.
Digital closings, especially Remote Online Notarization, for HELOCs and HELOANs give lenders a competitive edge:
Faster execution: Smaller packages (35–85 pages) mean digital transactions close even faster than first mortgages.
- Automation: Reduces manual effort, cuts errors, and streamlines everything from document preparation through post-closing.
- Convenience for borrowers: With Remote Online Notarization (RON), borrowers can close from anywhere. No need to coordinate with a mobile notary or visit a branch.
- Security and compliance: Enterprise-grade protections and eVault capabilities ensure safe, compliant storage and readiness for secondary-market execution.
- Speed to operational impact: Unlike traditional technology rollouts that can take quarters, modern digital-closing platforms can now be implemented in a matter of weeks—allowing lenders to quickly meet rising borrower demand while capturing new efficiency gains.
Snapdocs Powers Digital HELOC and HELOAN Closings
Snapdocs supports digital closings for a wide range of loan products, including HELOCs and HELOANs, and has helped hundreds of lenders realize value fast. With our proven, white-glove implementation framework, Snapdocs lenders launch digital closings in as little as 45 days.
We pair AI-powered technology with hands-on operational expertise to ensure a smooth rollout with minimal disruption. That includes guided change management, structured onboarding, and domain experts who help teams adopt digital workflows with confidence. This approach drives 3.5x higher eClose adoption than the industry average, while consistently delivering strong borrower experiences (+10 consumer NPS).
Lenders like America First Credit Union, who achieved 100% eClose adoption across its home-equity products, and Elevations Credit Union, who digitized key workflows to improve efficiency and member satisfaction, demonstrate what’s possible when digital closing infrastructure is done right. Their success shows how quickly lenders can modernize home-equity operations and unlock meaningful gains in speed, quality, and borrower experience.
Whether home-equity closings are managed in-house or through title partners, Snapdocs fits seamlessly into existing operations and scales as volume grows. With integrated eClose, RON, and eVault solutions, lenders can streamline home-equity closings, reduce operational costs, and prepare for evolving investor standards—while benefiting from ongoing partnership after go-live.
Learn how you can digitize your home equity business.
1 MBA’s Weekly Applications Survey, September 2025
2 Fannie Mae Economic Development, March 2025
3 MBA Home Equity Lending Study 2025
4 National Mortgage News, US home equity drops $374B as underwater mortgages rise
