How Long Does It Take to Get a HELOC?

The HELOC is a secured credit line that can be funded quicker than most home loans if the borrower is organized and follows the steps we outline below to get a home equity line of credit approved and closed. The RefiGuide will help you streamline the process of getting a HELOC loan quicker than most banks and lenders are quoting. We can match you with experienced home equity lenders that specialize in automated HELOC approvals online.

At RefiGuide, we connect you with the best home equity lenders online to help you get a HELOC quickly approved and closed.

As mentioned in previous articles, the Home Equity Line of Credit is also called a HELOC.

The HELOC is a 2nd mortgage that offers a flexible, revolving line of credit secured by the equity in your home.

It’s a popular option for homeowners looking to finance major expenses, consolidate debt, or make home improvements.

One of the most common questions about HELOCs is, “How long does it take to get one?”

The timeline for obtaining a HELOC can vary based on several factors, including the lender’s processes, your financial situation, and the complexity of the application. In this article, we’ll explore the steps involved in getting a HELOC and the typical timeframe for each stage.

Understanding the HELOC Application Process

The HELOC processing time can be relatively quick from the moment a borrower completes the home equity line application. The next step involves meeting the bank or lender’s eligibility requirements, which we will discuss in detail. Generally, applying for a HELOC takes about 4 to 6 weeks, but they can close quicker if you are working with the right lender. Every HELOC lender is not created equally. That’s why its important to do your due diligence and choose the right mortgage lender.

The duration largely depends on how promptly you, as the borrower, provide the required information and documentation, as well as the lender’s underwriting and processing times.

The RefiGuide will introduce you to lenders that will guide you on the necessary paperwork and documentation to expedite the process. We will help you reduce the time to approval and funding by preparing these documents before you apply for a HELOC online.

This article covers everything homeowners need to know to ensure they can obtain a HELOC as quickly as possible.

The HELOC process involves several key steps:

  • Pre-Application Preparation
  • Application Submission
  • Credit Review and Approval
  • Home Appraisal
  • Underwriting
  • Signing and Closing 

Each of these steps can vary in duration depending on the lender and your specific circumstances.

Step 1: Pre-Application HELOC Preparation (1-2 Weeks)

Before you even submit your HELOC application, there are several preparatory steps you should take to ensure a smooth process:

Evaluate Your Equity: Determine how much equity you have in your home. Most lenders require at least 15-20% equity to qualify for a HELOC.

Check Your Credit Score: A higher credit score can improve your chances of approval and secure better interest rates. If your score is low, consider taking steps to improve it before applying.

Gather Financial Documents: Lenders will require documentation of your income, employment, debts, and assets. Gather pay stubs, tax returns, bank statements, and any other relevant documents.

Compare Lenders: Review HELOC offers from different lenders to find the best terms and rates. Look for reputable lenders with positive customer reviews.

Step 2: HELOC Application Submission (1-2 Days)

Once you’re prepared, the next step is to submit your HELOC application. This can usually be done online, over the phone, or in person at a bank or credit union. The application form will ask for basic information about you, your property, and your finances. Submitting the application itself typically takes only a day or two.

Step 3: Credit Review and Initial HELOC  Approval (1-2 Weeks)

After you submit your HELOC application, the lender will review your credit report and financial documents. This review helps the lender assess your creditworthiness and determine if you meet their requirements for a HELOC. During this phase, the lender may ask for additional documentation or clarification on certain points. This step can take anywhere from one to two weeks, depending on the lender’s processing speed and your responsiveness.

Step 4: Home Appraisal (1-3 Weeks)

A crucial part of the HELOC approval process is the home appraisal. The lender will order an appraisal to determine the current market value of your home. This step ensures that there is sufficient equity to secure the HELOC. The appraisal process involves scheduling a visit from a licensed appraiser, who will inspect your property and compare it to recent sales of similar homes in your area. The actual appraisal visit typically takes a few hours, but scheduling and completing the appraisal report can take one to three weeks.

Step 5: Underwriting HELOC Loan Application (1-2 Weeks)

Once the appraisal report is complete, your application moves to underwriting. The underwriter reviews all the information collected during the application process, including your credit report, financial documents, and the appraisal report. The underwriter’s job is to ensure that you meet the lender’s criteria and that the HELOC is a sound financial decision for both parties. This step can take one to two weeks, depending on the complexity of your application and the lender’s workload.

Step 6: Closing and Funding HELOC (1-2 Weeks)

After underwriting, if your HELOC is approved, you’ll move on to the closing stage. The lender will prepare the final loan documents, which you’ll need to review and sign. Closing can take place at the lender’s office, a title company, or even remotely in some cases. During closing, you’ll also pay any closing costs associated with the HELOC. Once all documents are signed and any required payments are made, the lender will activate your HELOC account, and you can begin drawing funds. The closing process typically takes one to two weeks.

Factors That Can Affect the Timeline
While the steps outlined above provide a general timeline, several factors can affect how long it takes to get a HELOC:

Lender Efficiency: Some lenders have streamlined processes and can move faster than others. Online lenders, in particular, may offer quicker approval times compared to traditional banks.

Your Financial Situation: If you have a straightforward financial situation with a high credit score and substantial equity, the process may move more quickly. Complex financial situations or poor credit can slow things down.

Document Readiness: Being prepared with all necessary documents can speed up the process. Delays in providing documentation can extend the timeline.

Appraisal Scheduling: The availability of appraisers in your area can impact how quickly the appraisal is completed. In busy real estate markets, it may take longer to schedule an appraisal.

Communication: Promptly responding to any requests from your lender and staying in communication can help keep the HELOC process on track.

Tips for a Faster HELOC Loan Process

To expedite the HELOC process, consider the following tips:

Be Prepared: Gather all necessary documents and information before you apply.

Choose the Best Mortgage Lender: Look for lenders known for efficient processing and good customer service.

Stay Responsive: Quickly respond to any requests for additional information or documentation.

Schedule the Appraisal Early: If possible, schedule the home appraisal as soon as your application is submitted.

Ask Questions: If you’re unsure about any part of the process, ask your lender for clarification to avoid delays.

Traditional HELOC Requirements

Loan to Value: Generally, 75 to 80% loan to value is pretty standard. that means you need 15-20% equity in your home to qualify.

Credit Score: Lenders Most banks and credit unions want a 700 credit score. There are a many HELOC lenders approving credit lines with a minimum credit score of 620. There are a few private lenders that will approve HELOCs with a minimum credit score of 580 if you have enough equity.

Debt to Income Ratio: The DTI ratio compares your monthly earnings to your monthly debts. Most lenders prefer a debt to income ratio of 43% or less, though some may accept up to 50%.

Other Alternatives to HELOCs

If you need cash out and want to consider some alternatives to the HELOC product line, we recommend that you consider all sorts of financing. The most popular alternatives are the home equity loan, cash out refinance, personal loan and the home improvement loan. Closing costs and processing timelines vary depending upon the loan type.

Personal loans can fund quickly but the interest rates are higher and the loan amounts allowed are much smaller. Cash out refinancing has higher closing costs, but the interest rates are lower but they typically take longer to process. The home equity loan process timeline is very similar to the HELOC and the so are the interest rates and closing costs.

The RefiGuide will help you shop and compare HELOCs, cash out refinances, home equity loans and personal home improvement loans as well.

FAQ for Getting a Quick HELOC

How quickly can you get a HELOC?

Technically, you can take out a home equity loan, HELOC, or cash-out refinance immediately after purchasing a home. However, this is uncommon because you won’t have much equity to draw from so soon after buying the property.

Where can you get a HELOC account?

HELOCs are available at most financial institutions that offer home loans. While a local credit union or bank branch might be a convenient option, you can also explore HELOC lending options online. The RefiGuide can help you shop lenders that offer the best HELOC rates with quick closings.

Can you get a HELOC on a commercial property?

HELOC loans are offered when a borrower is using their home or real estate property as collateral. The RefiGuide can connect you with mortgage lenders that offer financing on residential real estate. You are allowed to uses HELOC funds for various business expenses, such as remodeling, purchasing equipment, and covering working capital costs.

The HELOC Timeline

Most companies will tell you that the HELOC loan process typically takes about two to six weeks. The exact duration depends on the lender, the complexity of your application, and how quickly you can gather the required paperwork.

Closing on a HELOC typically takes between four to eight weeks from start to finish, with some variability depending on your circumstances and the lender’s processes. By understanding the steps involved and being proactive in your preparation, you can help ensure a smoother and more efficient HELOC application process. Whether you’re looking to finance home improvements, consolidate debt, or cover other major expenses, a HELOC can be a valuable financial tool when used wisely.

Take a few minutes, complete the HELOC application and the RefiGuide will match you with top home equity lenders that best best meet your needs in getting a home equity line closed quickly.