Homeowners often use a HELOC as a back-up source of funding, and it’s easy to see why. A HELOC, or home equity line of credit, works much like a credit card — you can borrow as often as needed up to an approved limit, and your available credit replenishes as you make repayments.
But the best thing about HELOCs? They usually cost a lot less. According to the Federal Reserve, the average annual percentage rate for credit cards has climbed to 17.13%, yet S&P global data revealed a much lower average HELOC rate — at just 4.17% in 2021. By using a HELOC rather than a credit card, borrowers can save more than four times the interest.1navigates to numbered disclaimer
How does a HELOC work?
A home equity line of credit allows you to borrow against the available equity in your home. Equity is something you build over time as you pay down your mortgage and the outstanding balance of your loan dips below the market value of your property. Generally, lenders loan up to 85% of a borrower's equity.
HELOC or home equity loan?
Homeowners looking to borrow against their equity can also consider a home equity loan. Like a HELOC, a home equity loan is secured by the borrower’s property. This type of loan provides a lump sum upfront and the borrower makes fixed repayments throughout the loan term. It’s ideal if you know how much you need to borrow and prefer a predetermined payment schedule.
A HELOC on the other hand offers flexibility in situations where you’re expecting a large expenditure but are unsure exactly how much you’ll need, and when — renovations, children’s education, and debt consolidation are often financed this way. Since borrowers can tap into their line of credit as needed over a set period, they can borrow as much as they need and have the peace of mind that they‘ve got emergencies covered in addition to large purchases.
Getting a HELOC with Figure
Figure offers HELOCs on single-family residences, townhouses, and most condos.
Just as when you applied for a mortgage, factors like your credit score, employment status, the state you’re in, and your monthly income and expenses can impact the approval of your HELOC as well as the terms you’re offered.
Those who choose Figure as their loan provider enjoy the following benefits:
Lower fees. With Figure, there are no account opening fees, maintenance fees, prepayment penalties, or other nasty surprises. Figure only charges a one-time origination fee to cover the cost of providing the loan and it’s included in the loan payment schedule.2navigates to numbered disclaimer Some borrowers may qualify for a lower origination fee option, but this would depend on their credit profile and the state where the property is located.
Fixed interest. While many lenders provide variable-rate lines of credit, Figure fixes the interest rate for each draw to the rate applicable on the date of the draw.3navigates to numbered disclaimer
100% online application. Figure’s application is all done online and no in-person appraisal is needed. The process is quick and easy, and you can apply from the comfort of your home at a time convenient for you.
Fast approval. You can get a decision for your application within minutes and funding in as few as five days.4navigates to numbered disclaimer
Easy payments. Finding out when your next payment is due is simple — just log into your Figure online account or refer to your statement. Pay via one-time Automated Clearing House (ACH) payments or set up recurring Autopay to make things even more stress-free.
Apply for a HELOC from Figure today
Figure offers the fastest way to convert your home equity into liquidity, so you access cash for things that matter without delay.
In fact, applying for a HELOC with Figure can be done in a snap. Simply head to the Figure website and provide basic details about yourself, your home, and your employment history to see your preliminary offer and rate — all without affecting your credit score.5navigates to numbered disclaimer Once your income and assets are verified through Figure’s automated process, you can finalize the arrangement by signing your loan documents. If the digital notary service is available in your location, you can even do this effortlessly from your own home.
Apply for your HELOC today with a turnaround in a little as five days!
