How long does it take to get a HELOC? A guide

Home equity lines of credit (HELOCs) are tremendously popular with homeowners. They offer a lot of flexibility, but one of the downsides is how long it sometimes takes to get funding: two to six weeks, on average. 

That’s a long time to wait for a HELOC or home equity loan, especially if you need that cash sooner rather than later. Luckily, there are many ways you can speed the process up. 

How long does it take to get a HELOC?

A typical HELOC takes between two and six weeks from application to funding. This includes time spent gathering your loan documents, filling out the application, getting a home appraisal, going through the underwriting process, and then finally receiving your HELOC funds. 

Each one of those steps can introduce lags or jumps forward in the HELOC application timeline, depending on how each lender works and how responsive you are to lender requests. Some lenders are simply much quicker than others, which can be helpful if you’ve got an urgent — but not necessarily immediate — funding need.  

What does the HELOC process involve?

So, how long does it really take to get a HELOC? The answer is, as always, “it depends.” Let’s go through the HELOC application process to help you see what factors could affect your funding timeline, and what you can do to move forward quicker. 

Application and documentation

Each lender has a different HELOC application process. If you do some research ahead of time, you can often find out which lenders offer faster HELOC approval timelines. 

Once you’ve found a lender, the first step is to submit an application. These days, you can usually do this online. Most lenders will require the same types of details, so gathering this beforehand can help speed up the process:

• Home details: Purchase date and price, date it was built, any liens on the home (such as a mortgage), etc. 
• Personal details: A copy of your driver’s license, Social Security card, your Social Security Number, etc. 
• Financial documents: A copy of recent pay stubs, mortgage statements, bank and investment statements, home insurance policy documents, property tax assessment statements, etc. 

Home appraisal

Your lender will order a home appraisal to see how much your property is actually worth and how much home equity you have. They can then use this to calculate your loan-to-value (LTV) ratio, which can help determine what, if any, amount of credit you might qualify for. 

Lenders who process applications faster generally use a home appraisal calculated from an automated valuation model (AVM). These are the same types of models that real estate websites like Zillow and Trulia use to estimate your home’s value. An AVM appraisal is generally very fast and cost-efficient, but it may not be as accurate, particularly if you’ve done a lot of interior work on your home lately. 

Slower lenders may require a traditional home appraisal, where an appraiser comes to your home, physically inspects it, and then writes up a report based on local market conditions. It’s a lot more work, and you’ll need to schedule an appraiser in advance, which can slow the process down even further. In-person home appraisals are also more expensive, typically costing several hundred dollars. 

Underwriting and approval

Your lender will then verify your application, crunch the numbers, issue a decision, and prepare your loan documents, if you’re approved. This step is especially important, because it’s how your lender will determine whether you’re able to afford your potential HELOC payments or not. 

You can speed up the process during this time by staying in close contact with your lender, especially if they have any further questions or need any additional documents. 

Closing and funding

When everything is ready to go, you’ll need to sign the HELOC closing documents your lender has prepared. If your lender requires in-person signing, you’ll need to schedule an appointment to come in and sign the loans. Alternatively, if your lender works with mobile notaries, they may be able to work around your schedule and location more easily. In some cases, you may even be able to do it online. 

Next, you’ll essentially receive the keys to your HELOC. If your lender requires any opening draws, you’ll see that money in your bank account as soon as the transfer goes through. Your lender will show you how you can request additional draws and explain other important details of managing your HELOC. 

HELOC alternatives

It’s always important to compare alternatives when you’re looking at a specific financing option. That way, you can be more confident in your choice, or possibly find something that works even better. 

• Home equity loan: Home equity loans are often a better choice for specific borrowing needs, since you’ll receive a one-time lump sum of funds, instead of the ability to re-borrow during a defined draw period. It comes with a steadier payment, too, due to its fixed interest rate. 
• Cash-out refinance: Cash-out refis allow you to get a lump sum of funds just like with a home equity loan, but you do it while refinancing your mortgage, together with your new debt. It can be a good option if you need a large one-time sum and can qualify for lower mortgage rates, too. 
• Home equity investment (HEI): Home equity investments also offer a one-time lump sum, but they require no monthly payments since you agree to share a slice of your home’s future equity in 30 years. An HEI may be more accessible if your credit score is lower or your debt-to-income (DTI) ratio is higher than what’s typically required for a HELOC or home equity loan.

Frequently asked questions

Can I get a HELOC quickly for an emergency?

Probably not. Even the quickest HELOC lenders take several days from application to funding. If you’re in a true emergency, a credit card or personal loan may be a better choice, since some lenders offer same-day funding for these unsecured products. 

Does a HELOC have a closing period like with a mortgage?

Yes. A HELOC is considered a second mortgage, and while the underwriting process doesn’t take quite as much time, it’s still much longer than with an unsecured debt. All home equity products, including home equity loans, cash-out refis, reverse mortgages, home equity investments, etc., operate this way because the lender needs to take extra time to verify the amount of equity in your home.

What can delay the HELOC approval process?

Several things could slow down approving and funding your HELOC. If you apply with a co-signer, apply with a lender that requires a full appraisal, or just apply with a lender that has a slower processing timeline, it could take longer to approve your HELOC.

Final thoughts

If you’re in a hurry and you need funding now, a HELOC likely isn’t your best approach. Look for unsecured options like personal loans or credit cards, starting with your own bank and working outward from there. 

If you can afford to wait a little bit to get a HELOC and all the benefits it comes with, take note of what’s most important to you. Do you want the best rate? Better draw options? Faster funding? Fortunately, HELOC lenders abound, and it shouldn’t be too hard to find a lender that can meet your needs. 

Prefer financing that won’t restrict your monthly cash flow? Explore a Home Equity Investment from Point.