When you are done with paying your mortgage, you develop equity in your home. And the very question comes with that, “How long does it take to get a home equity loan?” What does the approval process include, and how long will it take?
It is important to understand the steps of the home equity loan process along with the discovery of home equity loans. This way, you will be able to reduce the risk of any delays along with speeding up the process so that you can access your funds sooner.
How Long Does It Take To Get A Home Equity Loan?
If you are searching for a single answer, then let me tell you that there is no one answer to the question, “How long does it take to get a home equity loan?” with every different lender, whom you will ask, the answer will change.
With the whole process, home equity loan approval can take between one or two weeks up to months in some cases. Many lenders will also say that it will take between two and six weeks on average to get a home equity loan.
It is vital to keep in mind that all these timelines and windows are flexible. And this is because there are some factors, such as the underwriting process and home evaluation. From anyone else’s time, your timeline will be unique, so it will be best if you directly ask the lender.
The Home Equity Loan Process
When we are questioning, “How long does it take to get a home equity loan?” It will be best if we gather some ideas about the process.
In order to get the specific details of your lender’s application process, it will always be best to consult with them directly. Here is the outline of the basic steps that most lenders usually follow.
1. Check Qualification
Before qualifying for a home equity loan, you need to meet some home equity loan requirements. However, these requirements will vary from lender to lender. Here are some most common requirements or qualifications that you need to meet.
- Minimum 15% to 20% equity in the property.
- Evidence of steady income record and steady employment.
- A low debt to income ratio that is below 50%.
- FICO score of above 620.
2. Choose A Lender
Once you are confident about the home equity loan requirements, it is time to search for a lender.
Though it is really great to get a lender on the very first try, it is really cool if you compare some of your options. As the response rate varies from lender to lender, expect to take a few weeks.
3. Submit Application
In case you are not sure where to get all those documents, or you do not have that specific paperwork anymore, have a talk with your lender.
Often, they will be able to help you in figuring out how to get those specific documents or also assist you in filing with the local government in order to find property records.
4. Get A Property Evaluation
There can be circumstances when you need property investigation and evaluation by a certified appraiser.
But on the basis of your lender, the exact requirement may differ. You can go through the guide for preparing for home appraisal visits.
Once you are all done with property evaluation, an underwriter will compare your financial profile with the requirements of a home equity loan.
By examining your borrowing history and creditworthiness, this comparison will determine whether you will officially get the approval or not. The underwriting of the application and the whole processing can take a full month’s timeline. So it is vital to have patience at this stage.
Closing is the final stage. In order to finalize your loans, you will meet your lender along with other essential parties in this stage.
This stage also includes signing your paperwork, along with arranging for the disbursement of funds. It will take a week or less than that.
Factors That Can Impact Timeline
When the question is, “How long does it take to get a home equity loan?” It is also important to get an idea about the factors that can influence the timeline.
1. Insufficient Documentation And Application
You also may need to submit your proof of income, property tax bill, along with the current mortgage statement.
If you do not have these documents ready, it will delay your process.
As verification needs a detailed review of all your property information and financials, this portion usually takes the most extended amount of time.
In case you are worried about checking any of those items will run them into travel; offer any supplement that will speed up the process.
3. Home Valuation
The final appraisal will verify the worth of your home. With scheduling this, your lender will usually assist you.
On the basis of the busy schedule of the appraiser, it may take more time than it was initially assumed.
Finally, in order to sign and also deliver the final document, you will meet the lender and notary as well.
In case the presence of a lawyer is needed as per your state’s law, then the availability of your lawyer may also delay the process a bit.
So, now I hope you get the answer to your question, “How long does it take to get a home equity loan?” There are several factors in the whole process that will determine the amount of time that will be taken to complete the whole process. Some of the things are not in your control.
But at the same time, there are some things that you can manage to speed up the process. So, make sure all the documents are in proper order entire and do not delay with any of the requirements that are within your hands.
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