INTRODUCTORY RATES SIGNIFICANTLY IMPACT PROFIT


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Issues addressed in this 36 page consumer and competitive study include:

• How large is the market for home equity loans and lines of credit and which product has higher demand?
• What are the profiles of current and potential users?
• How long have equity users been with their current lender?
• What percentage of equity users report that there is an early closure feature on their loan?
• What percentage of borrowers already had existing accounts at the firm where they obtained their equity products?
• Which media source was most effective in attracting borrowers?
• How did borrowers make their initial application?
• What is the Internet's role in loan applications?
• What is the relationship among interest rate, introductory rate and line balance required to obtain the lowest interest rate?
• How sensitive are consumers to tiered balance requirements on equity lines of credit?
• What impact do balance levels have on the profitability of lines priced at or below the prime rate?

Commissioned by the 200 syndicated financial institution clients of the Raddon Financial Group (RFG), this section of RFG’s comprehensive Fall 2000 research study explores the current state of the home equity credit market and the consumer’s use and perceptions of home equity loans and lines of credit.

Based upon 1,351 survey responses of a randomly drawn sample of members of a nationally representative direct mail panel, the consumer responses used in this study were weighted to reflect the nation’s demographic composition. The study’s confidence interval for any proportion gathered in the survey is in a range of 1.5% to 2.7% at the 95% level of confidence.

RFG will provide a customized set of data tabulations using a segmentation scheme based on specific variables.