A survey by a technology service provider found that more than one out of every five respondents it queried is planning on taking out a home-equity loan next year.
MeridianLink Inc. reported Tuesday the results of a survey it conducted on 1,000 U.S. consumers that found 21 percent of the respondents are likely to open a new HEL during the next 12 months.
That’s more than double the 8 percent who indicated the same a year previous — a period when interest rates had just bottomed out at historical lows — according to the Costa Mesa, California-based provider of modern software platforms for financial institutions and consumer reporting agencies.
The ratio might be higher if it weren’t for a significant chunk of respondents who aren’t fully informed about HELs.
Meridian said 52 percent of those surveyed indicated they have a strong understanding of the home equity lending process, while 48 didn’t have a strong understanding — including 13 percent who had no understanding at all.
“Although those under the age of 55 are more likely to take out a home-equity loan in the next 12 months, they are less knowledgeable about how home-equity loans work (30 percent scored a 1/10) compared to those over the age of 55 (only 9 percent scored a 1/10),” the announcement stated.