Austin fintech startup Hitch has rolled out a HELOC platform to help homeowners tap into more than $100 billion in government grants available for home renovation.
Established at the start of 2022, Hitch will give qualified owners access to up to 90% of the equity locked in their homes, the company said Thursday. One of the biggest benefits for Hitch users is speed, the company said. Once approved, borrowers can access their funds in under three days.
Most HELOC programs offered by big banks take on average 66 days to get approval, according to the Mortgage Bankers Association.
“The average American has more than 70% of their net worth tied up in the equity of their house,” said William Schoeffler, CEO and founder of Hitch. “That is money they’ve earned and saved, and we want to make it as easy as possible to access that for home improvements, debt consolidation, or whatever else they may want to use it for.”
Hitch has raised $2 million since its launch this year. The company plans on launching a flexible HELOC that allows customers to open a line of credit without having to take a draw and enables them to convert outstanding balances to fixed rate payments in early 2023, Schoeffler said.
“Most non-banks market HELOCs but they are truly offering HELOANs. If it’s actually a HELOC it’s typically a full draw which defeats the purpose of it being a line of credit,” he said.
Hitch, currently operating in Oregon, Colorado and Florida, had “several hundred signups for HELOCs” since its soft launch in August, Schoeffler said, with no mention of specific numbers.
It aims to be in 10 states “in the next few months,” with a long term goal of offering “the lowest interest financial product.”
“We believe that we can replace high interest credit cards and personal loans for homeowners and be the favored borrowing tool for them,” Schoeffler said.