In a rising-rate environment where many homeowners have secured record-low mortgage rates, the lending industry is focusing on home equity. For a variety of reasons, home equity lending can take various forms. Different types of validations are required, the approval process must be expedited, and costs must be kept to a minimum. This is where automation comes in for lenders.

Lenders should use an automated tool that is easily customizable and tailored to validate specific data for home equity lending. Because the risk level varies, the lender must be able to adjust the severity levels on the home equity alerts they receive.

Data validation is a time-consuming, often manual process that can save lenders significant time and money when transitioning to a more automated solution. Furthermore, the validation requirements for home equity lending and mortgage lending differ slightly.

Saving time requires the ability to instantly validate simple, redundant data points such as property value, ownership, phone numbers, identity, and internal watchlist. Using a solution with distinct verification options, such as employment or homeowners’ insurance (HOI), can help some lenders gain a competitive advantage over others. Until recently, HOI was only available manually and could be challenging to locate, but solutions that provide this type of verification are now available.

Whether a lender is new to the home equity space or simply putting more emphasis on it, the best advice is to look at what you already use and see if it can be modified to work specifically for home equity. With strategic alignment with innovative partners, lenders can also leverage automation and technology to ensure that cost is kept at a minimum for borrowers and serve a mutual benefit to both parties. Click here to read more on this.