Getting a Home Equity Line of Credit (HELOC) is a popular option for financing many major expenses, including home improvement projects and debt consolidation. We recently talked about the benefits of using a HELOC like this in our free eGuide, “Understanding & Using a HELOC to Finance Your Next Big Project.”
When is a HELOC a good idea?
A HELOC can be a good option if you need to access a large amount of money but don’t want to pay the high interest rates that are associated with credit cards, debt consolidation programs, and store financing.
A HELOC can be used for just about anything, which makes it really flexible and a popular option for homeowners who are looking to make home improvements, consolidate debt, pay for college, or taking a major trip or vacation.
Unlike a home equity loan, a HELOC doesn’t have to be provided in one lump sum. You will be given access to a line of credit, which you can draw from over time. During this time you will make payments on the money you use.
A HELOC is a good option for homeowners who have equity in their homes. It’s also best if you have a good credit score and a low debt-to-income ratio.
So, how long does it take?
The short answer is this: it’s hard to say. Every situation is different. However, getting a HELOC is typically much shorter than the process of getting a mortgage. In many cases, a HELOC can close in less than ten days.
Let’s talk about some of the time-sensitive factors that go into getting approved for a HELOC.
Initial Application with a Lender
This usually takes only a few minutes and can typically be completed online. Your credit history and income will be factors in determining whether or not you are qualified to move forward with your line of credit application.
The Documentation Process
If you are approved to apply, you may need to provide the following documents:
- 2 years of W-2 statements
- 2 years of federal tax returns
- 2-3 months of bank statements
- 2-3 recent pay stubs from your employer
- Documentation of all other income, including tips, social security, and investment income
Getting a Legal Appraisal of Your Home
Your lender may order an appraisal of your home. The appraisal will be used to create a value estimate for your home.
This process will finalize the transaction and ensure that all parties understand the terms of the line of credit. The process is not much different than purchasing a vehicle or closing for other types of loans. It is much easier than the closing for your first mortgage loan.
Are you ready to get started?
If so, we are waiting to hear from you! Contact us today to set up an appointment to compare various financing options that are available to you through WEOKIE, including a HELOC.
If you want more information, don’t forget to check out our free eGuide below, which will answer many of your questions about applying for a HELOC, getting approved, and using your HELOC funds.
We look forward to hearing from you!
*See a WEOKIE rep for details. Federally Insured by NCUA.