How long does it take to get a HELOC?

You've decided to use the equity in your home to cover the cost of a project, and you're excited. However, questions are swirling in your mind, such as "How long does it take to get a HELOC?"  

Here, we help you understand the stages of applying for a HELOC and provide practical tips that may help you avoid funding delays. 

How long does it take to get a HELOC?

HELOCs often move fairly quickly, and you could be approved and funded in under two weeks. The reality is, times can vary dramatically based on several factors. For example:

• How quickly you provide the lender with any requested documentation. 

• If the lender chooses to conduct a home appraisal and how long that process takes.

• How long your loan application remains in underwriting.

HELOC timeline step by step: from application to funding

Knowing what to expect could help you organize all your required documents, respond in a timely manner, and get an idea of how long funding is likely to take. 

Application and document upload (what you’ll need)

The first step is choosing a HELOC lender and submitting your application. Before applying, take the time to gather the documents you'll need, including:

• Government-issued ID, such as a driver's license or passport

• Social Security number or Individual Tax Identification Number (ITIN)

• Income verification

• Mortgage statement

• Homeowners insurance

• Property tax statement

• Recent bank statements

Tips: 

• Specific requirements may vary by lender, so it’s a good idea to confirm what your lender needs in advance.

• By uploading complete, readable documents early, you can help prevent processing delays.

Credit and income review (how approval works)

Some lenders offer a prequalification process for a quick, initial estimate of your borrowing power based on the financial information you provide. Prequalification generally requires no documentation and the lender conducts a soft credit pull that has no impact on your credit. Based on this prequalification, a lender can tell you whether you're likely to qualify for a loan, and if so, how much you're eligible to borrow and what your starting interest rate will be. 

Other lenders skip the prequalification process and go straight to a full, formal application. This process is called pre-approval. In either case, it pays to have your documentation ready to go. 

For pre-approval, your lender will need your tax returns, pay stubs, and any additional information about your income. For example, if you're paid on commission and your income varies, the lender will want to know. A hard credit pull will be conducted to ensure your credit history is strong enough to qualify for the loan. 

Home value review or appraisal

The lender needs to know how much your property is worth before making a final determination on your loan application. To do so, the lender orders a home appraisal. Lenders have different methods of verifying your home’s current market value.

• Some HELOC lenders use Automated Valuation Model (AVM) software. 

• Sometimes a lender might send a human appraiser to your home. 

The in-person appraiser may or may not need to enter your home. Find out when they’re coming so you can secure your pets, unlock your gate, put away those stacks of laundry, pick up skateboards on the walkway, or do anything else you need to do to prepare for the visit.

The type of appraisal can impact the time a lender takes to close on the loan and how soon you receive your proceeds. For example, it's not a guarantee but a lender who uses AVM may have a faster appraisal process than one who uses a human appraiser to visit your property. 

Underwriting and final conditions

Your HELOC application will go through underwriting: the lender reviews your information and determines whether to approve your loan. As the lender double-checks documents, underwriting may request additional information. By providing that information soon after it's requested, you can help keep your file moving.

The final loan offer

After underwriting and approval, your HELOC lender will tell you how much you can borrow and what your interest rate will be. Be sure to read your loan documents carefully and ask any questions. 

Closing

Think back to when you first purchased your home and all the paperwork that was involved in the formal closing process. Your HELOC is a second mortgage and secured by your home, so the lender (and you) want every important detail of the loan outlined.

Even if you believe you know every detail included in closing documents, reread everything before signing. If you have any questions, now is the time to ask. 

When funds are available (funded)

HELOCs usually take two to six weeks to process, from the time you apply to the time you get the funds. Some lenders, like Achieve Loans, could get you to the closing table in as few as five days. 

The precise timing can depend on the lender and legal requirements. For example, if the HELOC is secured by your primary residence, the Truth in Lending Act (TILA) allows you to cancel the loan for any reason, without penalty, within three business days of closing. The mandatory three-day cooling-off period doesn’t apply if the HELOC is for a vacation home, second home, or investment property. So you might not get access to the money until the three-day cooling off period has passed.

What can slow down a HELOC?

Here are some reasons it might take a little longer than you anticipated to close on your HELOC:

• Incomplete or inconsistent documents. Something as simple as a missing document could cause a delay. Whatever the issue is, you can get back on track by quickly answering any questions from the lender and providing any additional documentation when requested. 

• Appraisal. An appraisal could be slowed down by a scheduling conflict with a human appraiser. If you have a particularly unusual home and the appraiser needs to do some digging to find a comparable property, that could also hold up the process. 

• Title issues. One thing underwriting does is ensure your home title is clean. If underwriting finds any errors, liens against the property, mismatched names, or missing payoff information, it could take some time to get the matter sorted out. 

How to speed up the time it takes to get a HELOC

You can't control everything, but you can be prepared to help minimize the time it takes to get a HELOC. Here's how: 

• Before applying, ask the lender which documents it will require.

• Gather documents before filling out a loan application.

• Double-check all documents to ensure they're correct.

• Respond the same day to lender requests.

• Ask about how the appraisal process works and find out about typical scheduling times.

• Confirm that you're clear on draw rules and when funds are available. For example, is there a minimum draw amount, or are you required to draw 100% of the proceeds when you close on the loan?

If you need money and you’re a homeowner with enough equity, a HELOC might be a lot quicker than you thought. And fortunately, you can help speed the process when you:

• Gather the documents the lender requires before applying for the loan

• Responding quickly to lender requests for more information

• Learn about appraisal timing and draw rules in advance so you know what to expect

If you're considering a HELOC, you're already taking the first step by learning how they work. Once you decide for sure a HELOC is right for you, you'll be ready to apply with confidence.