Home Equity Line of Credit (HELOC)
Before you Apply
A HELOC is a revolving line of credit, similar to a credit card, that offers a way to borrow money using the equity in your home. It provides the flexibility of drawing money as needed instead of taking it all in one lump sum. It may even be 100% tax-deductible!
How can you use the money from a HELOC?
You can use the money to:
Pay for home improvements like an upgraded kitchen
Consolidate your high-interest credit card debts
Cover major medical expenses
Purchase a second home or investment property
Pay for a child’s tuition
Take a luxury vacation
What are the key highlights of the HELOC?
Borrow up to $400,000
100% Draw at Closing
Term of Either 5, 10, 15, or 30 Years
Draw Amounts in $500 Increments
What documents are required for the loan process?
• Copy of your valid state-issued ID
• Potentially proof of homeowners insurance
• IRS.gov or ID.me accounts for identity verification
• User IDs for bank accounts
• Certificates of Trust, if applicable
What type of properties are eligible?
• Northeast will work with lenders that offer loans on single-family residences, townhouses, Planned Unit Developments (PUDs), and most condos. The following properties are not eligible: co-ops, commercially zoned real estate, multifamily (2+) real estate, manufactured housing, earth or dome homes, timeshares, log homes, houseboats, or mixed-use properties.
• The property may be the applicant’s primary, secondary residence, or investment property.
What are some borrower application best practice tips to avoid denial?
• You must enter your information into the application 100% accurately, or you will receive a denial. Please check for the accuracy of all information before submitting your application.
• You only have one try on the application, so please take your time and ensure everything is correct. Call us if you have any questions before submitting – We are here to help!
• You must use your full legal name for the application.
• Please do not manually enter property liens separately. This creates duplicate entries, and you could be denied due to inflated ratios.
• It is required that you answer the question “Is this property for financing listed for sale?” as YES if you intend to sell the property within the next six months.
• Please have your User ID and password ready from your bank accounts.
• Register with IRS.gov or ID.me for ID and tax purposes. It does take a little time to register for these sites, and you will need a photo of your ID and be in front of a camera (phone or webcam) to set it up.
• Have your payroll provider username and password if your company uses ADP or similar.
Are Investment properties and second homes eligable?
The property may be the applicant’s primary, secondary residence, or investment property. The minimum required credit score is 680 for 2nd homes and investment properties.
How long does it take to get approved for a loan?
With the help of your loan officer most applicants can complete the application in 5 minutes and usually receive a decision within one day.
How do you verify my income?
We analyze inflow in your connected accounts to verify your stated income. We can perform this analysis through connected bank accounts, qualified asset accounts, tax returns and/or paystubs. All sources must be connected during the application process.
If there is more than one person on the home's title does everyone need to be on the loan?
How long will I have to wait to get a loan?
Most applicants can complete the application in 5 minutes. Once the full loan process is complete, the loan is typically funded within five days.
How long do I have to complete the loan process?
Identity and income verification must be completed within 14 days. After a credit report is pulled, your expiration date will be extended by 29 days.
What is a eNotary and how does it work?
Our eNotary will connect with you via an audio-enabled video session. The eNotary will confirm your identity via the ID you provided during the application process and ask you a set of knowledge-based authentication questions. Once you have authenticated, you will be able to review your mortgage document and electronically sign the document during the session. Once you sign, the eNotary will electronically notarize your document. Some counties do not allow eNotary. In these counties, we will schedule a mobile notary to meet the borrower at a location of their choosing to sign in-person.
When can I complete my eNotary session?
Our eNotaries are available Monday-Saturday from 6 am – 6 pm Pacific Time. You can resume your session during business hours if you apply after hours.
What are the HELOC rates?
Your rate cannot be determined until the time of application. Interest rates are determined by loan components through artificial intelligence. They will vary based on your credit score and the Loan-To-Value.
How does the initial draw work?
You will receive up to 100% of the HELOC amount.
As you begin to pay down your loan, you will be able to redraw up to 100% of your credit limit. Additional draws must be at least $500, and the total outstanding balance cannot exceed 100% of the credit limit. The APR is based on the prime index at the time of the redraw and the fixed margin rate outlined in their HELOC agreement. Credit will not be pulled again with requested withdrawals.
When is credit pulled during the process?
There will be a soft pull credit check when you apply and check the rate. This pull does not affect your credit score. If you choose to move forward and submit an application, a hard pull credit report will be generated.
What is the funding timeline?
Most funding happens within about five business days, which includes a 3-day rescission period. The rescission period lasts for three consecutive business days (all calendar days except Sundays and Federal holidays).
Can I pay back my loan early without penalty?
Yes, you may pay back your loan at any time. There are no prepayment fees.
How long do I have to take an additional draw?
Depending on your loan term, additional draws will be available for 2-5 years from your origination date.