Why Millions of Homeowners Are Locked Out of Their Home Equity
- Neil Caron
- 12 minutes ago
- 2 min read
Life happens. But in today’s market, unlocking the wealth inside your home isn’t as easy as it used to be.
At ReadySetLoan, we’re seeing a growing number of homeowners struggle to tap into their home equity—despite sitting on hundreds of thousands in unrealized gains. Why? Two words: credit shocks.
A recent analysis shows nearly 1 in 11 homeowners with a mortgage face life events—like job loss, income reduction, or becoming self-employed—that drop their credit score or make income hard to document. These setbacks make it nearly impossible to qualify for traditional equity access tools like cash-out refinances or HELOCs, especially in today’s high-rate environment.
🐷 RSL Piggy Points: What’s Holding Homeowners Back?
Higher interest rates mean cash-out refis can increase your monthly payments, not lower them
Career changes or gig work can cause a dip in creditworthiness—even if you’re still earning income
Lenders are stricter than ever, and HELOC denial rates remain higher than conventional mortgage denials
Over $700 billion in equity may be trapped due to these "negative credit shocks"
When Equity Is Out of Reach
"For years, homeowners relied on their equity to fund renovations, pay off debt, or invest in the future,” says Neil Caron, Area Manager at CMG Mortgage. “But now, the same equity is locked behind tighter underwriting rules and unpredictable financial events.”
Let’s break it down:
A homeowner who bought in 2018 may have gained over 50% in home value, yet cashing out $50K in 2024 could increase their monthly mortgage payment by 22% due to today’s higher rates
Meanwhile, nearly 9% of mortgage holders annually face a job loss, income dip, or self-employment status that can tank their credit score, just when they need liquidity most
Why the Traditional Playbook Doesn’t Work Anymore
The classic solutions—refinance, HELOC, or sell—don’t always make sense today:
Selling may not pencil out with high buyback costs
HELOCs can be tough to qualify for with a non-traditional income source
Refinancing might cost you more in monthly payments, especially if your current rate is under 4%
“We’re in a new era,” explains Caron. “Homeowners need better tools and more flexible strategies to access
equity without relying on outdated assumptions about career paths and interest rates.”
What Homeowners Can Do
At ReadySetLoan, we’re committed to educating homeowners on modern equity access solutions—including VA renovation loans, specialty programs for self-employed borrowers, and flexible income documentation alternatives.
Our expert resources and lending partners can help guide you through real options—even if your credit score has taken a hit or your income isn’t W2-based.
💡 RSL Perspective:
Equity should be a safety net—not a locked vault.As the economy shifts and nontraditional work becomes the norm, homeowners need smarter ways to access their wealth. Whether it’s a temporary income change, a side hustle gig, or life just throwing you a curveball, ReadySetLoan is here to help you navigate the obstacles with confidence.
Let’s Unlock Your Potential
Don't let a credit bump or a career pivot stop you from using the wealth you’ve built in your home.
Visit www.readysetloan.com to learn more and connect with an expert who can guide you through today’s options—with tomorrow in mind.
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