A home equity line of credit (HELOC) offers flexible access to funds, using your home as collateral. You might use a HELOC to cover home improvements, large planned expenses, or financial emergencies. But how long does it take to get a HELOC?
The typical HELOC processing time is usually anywhere from two to six weeks, though every borrower’s situation is different. If you’re interested in a HELOC, it’s helpful to know what kind of timing you can expect.
Key Points
• The typical timeline for obtaining a home equity line of credit is two to six weeks.
• Key stages include research, preapproval, application, document submission, property appraisal, underwriting, closing, and funding.
• Preparing documentation in advance can expedite the HELOC process.
• Ensuring the property is ready for appraisal can help speed up the timeline.
• Selecting a responsive lender with good customer service can smooth the application process.
Understanding the HELOC Application Timeline
First, what is a home equity line of credit? A HELOC is a line of credit that’s secured by your home; that’s the standard HELOC definition.
Applying for a HELOC is a multi-step process, and some stages may take longer than others. Here’s an estimate of how long to get a HELOC from start to finish.
• Research (1-3 hours). Before you apply for a HELOC, it’s helpful to spend some time comparing mortgage rates and terms from different lenders. Looking at three lenders at least can give you an idea of typical HELOC rates for people with your credit scores. You can also use a HELOC repayment calculator to estimate your monthly payments. Note: If you have an FHA loan, your current lender may not offer a HELOC, but you can get one through another lender.
• Preapproval (<10 minutes). Mortgage preapproval means a lender performs a soft credit check to conditionally approve you for a HELOC. Preapproval doesn’t guarantee that you’ll get a home equity line of credit.
• Application (<15 minutes). Many HELOC lenders offer online applications which may take just a few minutes to complete. Some offer initial approval in minutes.
• Submit documents (<30 minutes). Your lender will likely ask for supporting documentation to go with your application. You may upload them when you submit your application or later on. If you don’t have financial details such as your current mortgage statement, latest tax filing, or pay stubs easily at hand, you’ll need to budget another hour or two to pull your documents together.
• Appraisal (1 to 2 weeks). Your lender will need an appraisal to know what your home is worth. The appraisal itself should only take a few hours, but you might be waiting a couple weeks for the appraiser to finalize the report and submit it to the lender.
• Underwriting (2 to 4 weeks). During underwriting, the lender reviews your financial details, the appraisal report, and information about your home to finalize your loan.
• Closing (1 to 2 hours). If all goes well with underwriting, your lender will schedule a closing date. You’ll sign all the required paperwork, either online or in person, and pay your closing costs.
• Funding (1 to 14 days). After closing, your lender will make your HELOC available to you. You may get a debit card, ATM card, or paper checks, which can take a couple of weeks to arrive by mail.
This isn’t an exact timeline, but it’s designed to give you an idea of how quickly each phase of the process may move.
Factors Influencing HELOC Approval Time
How long does it take to get a HELOC approved once you’ve submitted your application? You’ll usually need to wait a few weeks, though it may be a shorter or longer wait, depending on your situation and the lender you’re working with.
Lender’s Processing Speed
Every lender is different with regard to processing speeds, and it’s important to understand how lenders measure them. For example, a lender may tell you that you can get approved in five minutes but you’ll still need to go through income and credit verification, which takes time.
How long does a HELOC take at a traditional bank vs. an online lender? It depends, but traditional banks can sometimes move slower than online lenders if their process is more involved. Some online lenders guarantee funding access within five business days after closing.
Documentation Preparedness
The documents you’ll need to apply for a HELOC are the same documents your lender asked for when you bought the home. The list of documents you’ll need includes:
• Pay stubs
• W-2s
• Tax returns
• Bank account and/or investment account statements
• Profit and loss statements and cash flow statements (if you’re self-employed)
How long it takes you to get these documents together ultimately hinges on your organizational skills. If you’ve got your documents prepared in advance, you won’t have to go hunting for them when you apply, which could slow the process down.
Property Appraisal
Lenders use an appraisal to estimate what your home is worth. That’s a requirement for any home loan. This is a nonnegotiable step for a HELOC, and how long it takes depends on your lender’s policies.
Some lenders offer what’s called a desktop appraisal, which is completed using property valuation software. An appraiser (or the lender) uses the software to pull data from public records and tax records to calculate an approximate value for the home.
Other lenders may require an in-person appraisal, which involves someone visiting your home to take pictures and measurements. A hybrid approach combines an in-person visit with valuation software. It may take a week for the appraisal to happen, and then you may be waiting another week or two for the appraisal report.
What if the appraisal comes in under your valuation expectations — how long does a home equity line of credit take then? There’s no set answer, since what happens next is usually up to you. You could ask the lender to reconsider the appraisal, or get a second opinion, which would involve scheduling another appraisal. Either option could add days or weeks to your HELOC timeline.
Underwriting Process
Underwriting is usually the most time-consuming step in the HELOC application process. This is when the lender will:
• Review your application
• Perform a credit check
• Verify your income and employment
• Review the appraisal report
• Calculate your loan-to-value (LTV) ratio, which measures how much equity you have in your home
• Calculate your debt-to-income (DTI) ratio, which measures how much of your monthly income goes to cover debt
• Perform a title search to see if there are any liens or legal claims against the property
• Request additional documentation from you or ask for clarification about information you’ve provided
• Draw up the final loan documents and schedule a closing date
How long does it take to get HELOC approval once you reach this stage? If there are no issues with your application and the home appraises the way you expect it to, underwriting can move fairly quickly. Some lenders may be able to get you to a closing in as little as two weeks.
Steps to Expedite Your HELOC Application
If you need access to HELOC funds sooner rather than later, there are some things you can do to try and speed up the process. These tips can help you avoid snags that could eat up more time.
Gather Necessary Documentation in Advance
A little preparation can go a long way where your documents are concerned. Rounding up all of the documents the lender needs to process your application beforehand means you don’t have to waste time tracking them down later.
Check the lender’s requirements to see exactly what you’ll need before you start your application.
• Ask your employer for copies of your pay stubs if you don’t have them.
• Download a transcript of your most recent tax return from the IRS.
• Download your bank statements and/or investment account statements from your bank or brokerage.
• Use a spreadsheet to create a simple profit and loss statement if you’re self-employed.
Each of these tasks may take a little time, but once you’ve got it all together, you should be set for a smooth application experience. Read our detailed HELOC guide to learn more about how HELOCs work so you’re fully prepared.
Choose a Responsive Lender
One thing that can slow a HELOC application down every time is a lender that drags its feet. You can avoid that situation by researching lenders to see how quickly they return approval decisions, complete underwriting, and fund a HELOC once it’s approved.
Also, consider how responsive the lender is if you have questions. For instance, do you have multiple ways to contact the lender? Does it offer 24/7 phone or chat support? How long does it take a lender to get back to you if you have to leave a message?
All of those things can make a difference when it comes to how long it takes to get a HELOC.
Ensure Property Readiness for Appraisal
If your lender requires an in-person appraisal, make sure your home is ready in advance. You can do that by:
• Cleaning and clearing away clutter
• Touching up paint and tackling minor repairs if necessary
• Sprucing up your curb appeal
It’s also helpful to make a list of all repairs or improvements you’ve made since you bought the home. If you’ve replaced your HVAC system or roof, for instance, that could have a significant impact on your home’s appraisal value.
The Takeaway
How long does it take to get a HELOC? In a perfect world, it’s a speedy process — but the reality is that HELOCs usually take at least a few weeks. If you know you’ll need a HELOC for future expenses, it’s important to get an early start on planning so you don’t have a long wait once you apply.
SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.
FAQ
What is the average time frame to get a HELOC?
An average time frame to get a HELOC is usually anywhere from two to six weeks. The actual timing will largely depend on your lender and whether any issues arrive during underwriting that could push back your closing date.
Can I speed up the HELOC approval process?
You can’t force a lender to move faster, but you can save time on your end by organizing your documents beforehand and making sure your home is appraisal-ready. Choosing a lender that offers fast approval and rapid funding can also make a difference.
Does the property appraisal affect the HELOC timeline?
The property appraisal affects your HELOC timeline, since you have to wait for it to be completed, then wait for the lender to receive the final appraisal report. If the lender uses a desk appraisal (where no in-person visit is needed), it may go a little faster. An in-person appraisal, on the other hand, could take one to two weeks to complete.
What documents are typically required for a HELOC application?
Lenders usually ask for documents that show proof of income and assets. So you may need to provide copies of recent pay stubs, W-2s, tax returns, and bank statements. If you’re self-employed, you can substitute a profit and loss statement and cash flow statement for W-2s.
Does my credit score impact the HELOC approval time?
A good credit score could potentially help you get approved for a HELOC faster, though the lender will still need to verify your income and review the appraisal. “Good” credit is a FICO® score ranging from 670 to 739.
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