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Austin fintech startup Hitch has launched a HELOC platform to help homeowners access more than $100 billion in government grants for home improvements.
Launching in early 2022, Hitch will allow qualified homeowners to purchase up to 90 percent of the equity locked in their homes, the company announced Thursday.
The company said one of the biggest benefits for Hitch users is speed. Once approved, borrowers have three days to access their funds.
According to the Mortgage Bankers Association, HELOC plans from most major banks take an average of 66 days to be approved.
According to William Schoeffler, CEO, and founder of Hitch, the average American has more than 70% of their net worth tied up in their home equity.
It’s money they’ve earned and saved, and we want to make it as easy as possible to use that money for home improvements, paying off debt, or whatever else they might want to do with it.
Around $2 million was raised by Hitch since their launch this year. Schoeffler said the company plans to introduce a flexible HELOC that will allow customers to open a line of credit without having to cash out and convert outstanding balances into fixed-rate payments in early 2023.
Schoeffler also said that most non-bank marketplaces sell HELOCs, but they do offer HELOANs.
In the case of a HELOC, it’s usually a full drawdown that doesn’t serve its purpose as a line of credit.
He also mentioned that Hitch, which currently operates in Oregon, Colorado, and Florida, has had “hundreds of HELOC signups” since its soft launch in August.
It aims to operate in 10 states “within the next few months” with the long-term goal of offering “financial products with the lowest interest rates.”
Schoeffler also said they believe we can replace high-interest credit cards and personal loans for homeowners as the preferred form of borrowing.
Reference Source: Housing Wire
