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%. By using a HELOC rather than a credit card, borrowers can save more than four times the interest.(1)
Despite potential cost savings for customers, some banks and lenders have stopped offering HELOCs in this economic climate. Fortunately, you could still get one from Figure. With a fully online application process and fast approval, Figure can help you convert equity into cash quickly without jumping through the usual hoops.
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.(6) 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.(3)
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.(4)
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.
Why blockchain is better
What sets Figure apart from the competition is that Figure’s tech is powered by blockchain, making financial transactions more secure and efficient.
Before blockchain was available, administrators, trustees, and other intermediaries were needed to verify all financial dealings. Now, blockchain ensures relevant information on every type of transaction — such as loan origination, electronic payment, and share trading, just to name a few examples — are all recorded and stored accurately without the need for third parties.
The result? Fast approvals and a seamless process for Figure customers.
Secure records you can trust
Blockchain makes records more secure because this system of recording relies on decentralization and consensus, which simply means information is distributed across a network of members. The benefit is that there isn’t a single point of authority or weakness that could corrupt the entire system.
To illustrate how this works, when you get a loan from Figure, a data block with your loan information is made. This digital data block is shared with a network of unbiased computers called nodes. These nodes are from trusted financial institutions all over the country, and each is required to sign off the creation and any changes to the data block, meaning a state of truth can always be maintained.
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.5 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!
1 The Figure Home Equity Line of Credit requires you to pledge your home as collateral, and you could lose your home if you fail to repay.
3 The Figure Home Equity Line is an open-end product where the full loan amount (minus the origination fee) will be 100% drawn at the time of origination. The initial amount funded at origination will be based on a fixed rate; however, this product contains an additional draw feature. As the borrower repays the balance on the line, the borrower may make additional draws during the draw period. If the borrower elects to make an additional draw, the interest rate for that draw will be set as of the date of the draw and will be based on an Index, which is the Prime Rate published in the Wall Street Journal for the calendar month preceding the date of the additional draw, plus a fixed margin. Accordingly, the fixed rate for any additional draw may be higher than the fixed rate for the initial draw.
4 Approval may be granted in five minutes but is ultimately subject to verification of income and employment. Five business day funding timeline assumes closing the loan with our remote online notary. Funding timelines may be longer for loans secured by properties located in counties that do not permit recording of e-signatures or that otherwise require an in-person closing. In addition, funding timelines may be longer if we cannot readily verify that your property is in at least average condition with no adverse external factors with a property condition report and need to order a desktop appraisal to confirm the value of your property.
5 To check the rates and terms you qualify for, we will conduct a soft credit pull that will not affect your credit score. However, if you continue and submit an application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
6 You will be responsible for an origination fee of up to 4.99% of your initial draw, depending on the state in which your property is located and your credit profile. You may also be responsible for paying recording fees, which vary by county, as well as a subordination fee if you ever ask Figure to voluntarily change lien position.