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How Long Does It Take It Get a HELOC?

HELOC processing time can be relatively quick, from the time a borrower completes a loan application. The next step is to meet the lender’s eligibility requirements, which we will discuss in detail. Applying for and obtaining a HELOC usually takes about two to six weeks.
How long it takes to get a HELOC will depend on how quickly you, as the borrower, can supply the lender with the required information and documentation, in addition to the lender’s underwriting and HELOC processing time.
This article covers everything homeowners need to know to make sure they can obtain a HELOC as quickly as possible.
At Credit Union of Southern California (CU SoCal), we make getting a Home Equity Line of Credit (HELOC) easy, so you can get a quick approval.
Call 866.287.6225 today to schedule a no-obligation consultation and learn about our home equity lines of credit, auto loans, personal loans, checking and savings accounts, and other banking products. As a full-service financial institution, we look forward to helping you with all of your banking needs.
How long does it take to get a HELOC? Read on to learn more! 

Get Started on Your Home Equity Line of Credit (HELOC)

What Is A HELOC?

A Home Equity Line of Credit (HELOC) is a type of “revolving” credit that is provided by a lender in the form of a loan that is secured by the equity in your home. HELOCs come with a credit limit and a variable interest rate.
All HELOCs have a “draw period” during which the borrower can draw from the loan. The most common draw period is 10 years. When the draw period expires, the loan’s variable interest rate will convert to a fixed interest rate, and the monthly repayments will now require that principal and interest be paid on the amount of the loan that was used.
Credit cards are another type of revolving credit but tend to come with higher interest rates than HELOCs, which makes them much more expensive when borrowing large amounts of money.
Many homeowners choose to get a HELOC to pay for large expenses such as home renovations, buying a second home or investment property, paying for college tuition, and paying-off high interest debt, to name a few.
HELOCs are a form of “secured loan,” meaning that all lenders require that the borrower put up security or collateral (in this case the borrower’s home) to secure the loan.
While HELOCs are an excellent way to get cash, keep in mind that because your home is used as collateral, if the loan payments are late or missed, the lender can foreclose and take possession of the home that was used to secure the loan.
If you already have a HELOC you may be eligible to refinance your HELOC.
Learn more at What Is A HELOC?.

How To Calculate Your Home Equity

Home equity is the dollar portion of the home that you own based on how much you owe on your mortgage, as well as any other secured loans that use the home as collateral.
For example, if you do not have a mortgage on your home, then you have 100 percent equity in the home. People who have a mortgage own only a percentage of the home (and the lender who holds the mortgage owns a percentage of the home).
As you pay down your mortgage, your equity increases until the mortgage is paid in full and you have 100 percent equity.
To calculate equity, take the amount your property is currently worth, or the appraised value, and subtract the amount of any existing mortgage on your property.
For example:
Appraised value is $600,000 – Amount owed on mortgage is $250,000 = $350,000 Equity 
How much equity do you have in your home? Try our home equity loan calculator.
Place a home equity loan calculator below this section. 

HELOC Eligibility Requirements

Credit unions, banks, mortgage companies, and some online lenders offer HELOCs.
Each lender has a unique set of qualifying requirements that their borrowers must meet to be approved for a HELOC. This will affect the HELOC processing time. The amount of money that can be borrowed is determined based on several financial factors that we’ll explain below. This also plays a significant role in how long it takes to close a HELOC.
Here are some typical HELOC eligibility requirements:
  • Home Equity. 15-20% equity in home is the norm.
  • Good Credit Score. Lenders typically look for a minimum credit score of 660.
  • Debt-To-Income Ratio. This ratio compares how much you earn each month to how much you owe. Most lenders look for a DTI ratio of 43% or less, although some will accept up to 50%.

To calculate your DTI, add-up all of your monthly expenses and divide this number by your gross monthly income (income before taxes), then multiply the number by 100 to get the decimal form.
For example: Debt of 2,500 + Monthly Gross Income of 5,500 = 0.4545 x 100 + 45.45%.
  • Adequate Income. Lenders will ask to see your W2s or 1099s and use these to evaluate your ability to repay the loan.
  • Good Repayment History. Have you paid your current mortgage on-time or do you have missed or late payments? Lenders want to know you’re a reliable borrower before they approve the loan.

How Long Does It Take To Open A HELOC?

As we mentioned at the beginning of this article, HELOCs can be processed rather quickly and funds dispersed in approximately two to six weeks. The time it ultimately takes will depend on a combination of factors including how quickly you can supply the lender with the required information and documentation and the lender’s general HELOC processing time.
In the next section, we cover some of the documentation you’ll need to get started with an application. Preparing these documents in advance can make the process go even quicker.
How long does it take to process a HELOC? Each lender has a unique HELOC processing time. If time is critical to you, be sure to ask your loan representative to give you an approximate timeframe for getting a HELOC.

How To Get A HELOC

If you’re interested in learning more about how long it takes to get a HELOC, start by talking to your current mortgage lender. This could save you time and money because your current lender will have much of your personal information still on file, and they may be able to provide you with a better rate due to your relationship with them. It’s always smart to shop around and speak to a couple of different lenders about HELOC interest rates and terms. Credit unions, banks, mortgage companies and online lenders all provide HELOC options.
If you’re ready to apply for a HELOC, be prepared to provide the lender with the following information:
  • Pay Stubs.
  • W-2s/1099s.
  • Tax Returns.
  • Bank and Investment Statements.
  • Mortgage Statements.
  • Home Appraisal. 
Learn more at: Getting A Home Equity Line of Credit.

Is Getting A HELOC Worth It?

Whether or not a HELOC is worth it largely depends on your financial situation. If you need a large amount of cash to draw from on a regular basis, then a HELOC may be worth it. HELOC interest rates are lower than credit cards rates, so you could save on interest payments over the course of the loan. Remember, HELOCs come with an adjustable rate that will become a fixed rate after the 10-year draw period ends. If you need a large sum of money and plan to pay it back in less than 10-years, a HELOC is a great option.
Did you know? HELOC interest is tax deductible only if the borrowed funds are used to buy, build, or substantially improve the taxpayer’s home that secures the loan.
Before you sign for a HELOC make sure you understand how the variable rate works and what the maximum rate could become.
People who prefer a fixed rate loan may consider applying for a home equity loan, which is paid back at a fixed rate. However, interest is charged on the entire loan amount whether you use it or not.
No matter which loan you choose, HELOC or a Home Equity Loan, remember that these loans are secured by the equity in your home and failure to repay the loan could result in the lender foreclosing.

HELOC Pros And Cons

Pros Cons
Only pay interest on the amount you spend Interest rate may rise during draw period
No closing costs Danger of using funds for frivolous spending
Low interest rates Making the minimum payment costs interest on the balance
Converts to a fixed-rate loan after 10 years Hidden fees
Tax advantage if used for home renovation Home value drops could cost you equity
Flexible spending Set withdrawal period
No fees for cash draws You can damage your credit if payments are late
Higher credit limit than credit cards Loan collateral is your home
Learn more at HELOC Pros & Cons.

HELOC vs. Home Equity Loan vs. Cash-Out Refinance

While there are many benefits to getting a HELOC, homeowners should also consider these options for getting the cash: 

Home Equity Loan

A home equity loan is a type of loan that lets you borrow money from a lender — such as a credit union, mortgage company, or bank — against the equity in your home. The amount of the loan a borrower is eligible for is determined by the difference between the home’s market value and the remaining mortgage balance. A home equity loan can be used any way you choose.

Cash-Out Refinance

A cash-out refinance involves replacing a current mortgage with a new mortgage loan (typically at a lower interest), and in the process, borrowing more money than what is needed to pay off the current mortgage. The first mortgage is paid off and the homeowner gets a lump-sum payout of the extra cash at closing.
Cash-out refinancing is a type of secured loan that uses the home as collateral. If loan payments are late or if payments are missed, the lender can put a lien on the property and foreclose. Homeowners who want to take advantage of a new low interest rate and get cash are most likely to see the benefits of a cash-out refinance. See how a cash-out refinance compares to a HELOC.

Features Of A CU SoCal HELOC And Home Equity Loan

A CU SoCal HELOC or home equity loan allows you to leverage the equity in your home to help you achieve your financial goals. Whether you’re looking to start that big renovation, make emergency repairs, or simply need additional cash-on-hand, we’re here to help make it happen.
  • No points.
  • No appraisal fees for single unit loans.
  • No annual fee.
  • No closing costs.
  • A generous limit up to $250,000.
  • Possible tax deductions on interest payments.

Why Savvy Consumers Choose CU SoCal

For over 60 years CU SoCal has been providing financial services, including mortgages, Home Equity Loans, HELOCs, car loans, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation loan consultation with a CU SoCal Member Services specialist.
Get Started on Your Home Equity Line of Credit (HELOC)

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Credit Union of Southern California (CU SoCal) is a leading financial institution empowering those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County to reach their goals and build strong financial futures. CU SoCal provides access to convenient money management services and offers competitive rates and flexible terms on auto loans, mortgages, and VISA credit cards—turning wishing and waiting into achieving and doing.


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