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MortgagePoint ยป Your Trusted Source for Mortgage Banking and Servicing News 46 November 2025 F E A T U R E S T O R Y NEW GROWTH AHEAD: TAPPING INTO HOME EQUITY AND NON-QM SYNERGIES With second-lien volumes at 17-year highs and non-QM sales projected to hit $100 billion, lenders are finding growth at the intersection of flexibility and borrower need. B y T O M DAV I S I f you ask mortgage leaders about industry growth areas for 2025, they are likely to mention at least two: home equity products (HELOCs and HELOANS) and non- QM. Home equity lending is surging. According to the June 2025 ICE Mortgage Monitor, second-lien equity withdrawals recently reached almost $25 billion, "the largest first quarter volume in 17 years." Non-QM lending, too, is on a roll. Not only was this the fastest- growing mortgage segment last year, but in 2025, non-QM sales volume should reach $100 billion. For mortgage executives and loan officers looking to capitalize on every pocket of opportunity, the growth of these individual segments and the synergies between them is noteworthy. Just like with first liens, some borrow- ers cannot qualify for an agency home equity product. For example, there are 15 million self-employed individuals in the United States, many of whom would benefit from an alternative non-QM home equity loan. So would many of the real estate investors who encom- pass about 30% of single-family home purchases today. It's the combination of the two segments, however, that is attracting attention. The non-QM industry has built an infrastructure based on flexibil- ity and personalization. Not only has it expanded its home equity and HELOC offerings, but it's also done so in creative ways to help loan officers tailor their solutions for the borrowers who require them. Wholesalers have also stepped up their training to help mortgage brokers and loan officers achieve mastery of this product line. The Trends Driving Home Equity Demand T here are many reasons that non- QM borrowers and agency bor- rowers are currently gravitating toward second liens and HELOCs. The desire to make home improve- ments is one major catalyst. The average U.S. home is 40 to 50 years old, and many properties could use repairs or up- dates. Home equity loans and HELOCs are a vital source of funding for these projects. Real estate portfolio expansion is another driver. During the last mort- gage boom, when origination volume reached $4 trillion and interest rates were ultra-low, a wave of business-pur- pose borrowers opted for cash-out refinancing of their income properties. This involved refinancing an existing mortgage and simultaneously cashing out some of the equity to buy more properties or finish renovations. If these same investors were to complete a cash-out refi now, they would forfeit the attractive interest rates they previ- ously locked in. Taking out a smaller, closed-end second mortgage or HELOC enables them to convert equity into cash without sacrificing these rates on their original mortgages. Then there is the ability to pay down other debt, such as the nearly $1.2 trillion Americans owe on their credit cards. A home equity loan or HELOC can help some borrowers eliminate or reduce that debt. Empowering Borrowers to Access Non-QM Alternatives T hese trends and more underlie the demand for home equity loans or HELOCs among potential non-QM loan T O M D A V I S is Chief Sales Officer, Deephaven Mortgage. Founded in 2012, Deephaven led the cre- ation and development of the non-QM/non-agency mortgage market and makes its loans available through mort- gage brokers and loan officers, in addition to buying loans from correspondents. Contact him at tdavis@deephavenmortgage.com or visit deephavenmortgage.com.