Education is the Key to Unlocking the Home Equity Opportunity
By: Tedd Smith, CEO
The home equity market is booming, but many banks and credit unions still leave money on the table.
With rising home values and limited housing inventory, more homeowners are choosing to stay put and tap into their equity instead. According to the June 2025 ICE Mortgage Monitor Report, American homeowners with a mortgage hold about $17.6 trillion in home equity, with $11.5 trillion of that considered “tappable” equity available to borrow against while maintaining at least 20% ownership in the home.
Other sources, such as the St. Louis Fed, which operates the Federal Reserve Economic Data (FRED), and HousingWire, estimate total homeowner equity, including those who own their homes outright, to be around $35 trillion. At the same time, demand for home equity products continues to grow. TransUnion reports that originations for HELOCs and home equity loans increased by more than 23% year-over-year from 2023 to 2024.
To truly capitalize on this moment, however, lenders must do more than roll out competitive products—they must invest in education. That means both internally, across teams, and externally, helping borrowers better understand how to access and leverage their home equity.
Start with Your Front Line
Tellers, branch staff and call center representatives are often the first to engage with members or customers, yet many lack the knowledge to identify home equity opportunities. Even originators may not fully understand how to position these products in today’s rate environment.
Too often, staff aren’t equipped to:
- Confidently explain the difference between a HELOC and a home equity loan and its benefits.
- Identify borrowers with equity-rich homes using internal or external data.
- Recognize life events that trigger borrowing needs (e.g., new baby, home renovation, education costs).
- Navigate digital tools or cross-sell effectively when equity options arise.
This knowledge gap can lead to lost opportunities, lower customer satisfaction and higher attrition. Your borrowers are likely being courted by other lenders and if your teams aren’t ready to educate and guide them through the process, someone else will.
To stay ahead, financial institutions must shift from being reactive to proactive when it comes to home equity—and that starts with internal education.
Here are five strategies to build a more confident, equity-focused team:
- Launch Targeted Product Training
Offer targeted, practical training on home equity products tailored to each role: tellers, loan officers, branch managers, etc. Make it simple, visual and applicable to real customer scenarios.
- Integrate Quick Reference Guides
Provide your team with cheat sheets, rate comparison charts, and FAQ documents they can use during live conversations. The easier it is for them to access answers, the more likely they are to cross-sell.
- Train on Digital Tools
If your home equity lending process includes online prequalification, calculators, or instant decisioning tools (like those powered by FirstClose), make sure staff know how to demo or reference them during conversations.
- Use Data to Identify Hot Leads
Train staff to recognize high-equity homeowners using available internal data. Trigger alerts or CRM flags for follow-up when borrowers meet certain thresholds (e.g., LTV under 60%).
Borrower Education is the Other Half of the Equation
Even though homeowner equity is at record highs, many borrowers still don’t fully understand what home equity is, how it works, or how to access it. In a home equity awareness survey FirstClose conducted, 40% of respondents did not know the difference between a closed-end loan and a HELOC. In addition, 37% of respondents mistakenly believed that if they took out a HELOC, they would give up their historically low first mortgage interest rate.
With rates still higher than they were just a few years ago, refinancing a first mortgage doesn’t always make sense. That’s why educating borrowers about second-lien products like HELOCs and home equity loans is essential.
Financial institutions have a unique opportunity to become trusted advisors by offering:
- Straightforward educational content on your website and social channels explaining home equity products.
- Calculators and digital tools that show borrowers how much equity they could tap.
- Personalized consultations or workshops for members who want to learn more.
Turn Knowledge into Growth
The institutions that invest in education, internally and externally, are best positioned to gain market share in today’s competitive home equity environment.
At FirstClose, we believe that great tech only works when paired with great people, and that starts with training. Our internal benchmarks have shown that institutions that leverage our digital prequalification tools see a 30-40% boost in application volume. FirstClose’s end-to-end home equity platform helps banks and credit unions streamline and accelerate the loan process, but we also work with clients to ensure their staff are confident and equipped to drive engagement from the inside out.
In today’s competitive lending landscape, product knowledge is power and empowered employees are your best marketing tool.
Ready to unlock the potential of your home equity program? Contact us to learn how FirstClose can help transform your pipeline.
