How Long Does It Take to Get a Home Equity Loan?

Getting a home equity loan can take anywhere from two weeks to two months, depending on your preparation of documents (such as W2s and 1099 tax forms and proof of income) your financial situation, and state laws. The home equity loan process time varies from lender-to-lender. Taking out a home equity loan allows homeowners to tap into the equity they’ve built up in their home and convert it into cash. This can be a great way to fund home improvements consolidate debt, or pay for other major expenses. But before you can access those funds, you’ll have to go through the loan application and approval process. Here’s an overview of the typical timeline and key factors that affect how long it takes to get a home equity loan.

Typical Home Equity Loan Timeline

The home equity loan process follows these general steps

• Initial Application This first step only takes about 15 minutes online or over the phone You’ll provide basic personal and financial information so the lender can give you a preliminary quote

• Document Gathering: Next, the lender will request documentation to verify your income, assets, debts, and home value. This usually includes pay stubs, W-2s, tax returns, mortgage statements, and a home appraisal. Gathering all these documents can take anywhere from a few days to a couple weeks.

• Underwriting: The lender will carefully review your application and documents to assess your creditworthiness and confirm you meet the loan requirements. It typically takes 1-2 weeks for underwriting.

• Loan Approval: Once approved, the lender will present the final loan offer and terms for your review and acceptance. This often happens within 1 week of underwriting.

• Closing: After accepting the offer, you’ll complete final legal paperwork and the lender will disburse the loan. Closing usually occurs 2-4 weeks from approval.

So in total, expect the home equity loan process to take around 2 weeks to 2 months from start to finish.

Key Factors that Determine Home Equity Loan Time

Several key factors can influence how quickly or slowly you’re able to get a home equity loan:

• Credit score and history: Borrowers with higher credit scores and a solid history typically get approved faster. If you have bad credit, it may require more time to get approved.

• Loan amount: Smaller loan amounts can usually be approved and funded more quickly than larger loans that require more extensive underwriting.

• Documentation readiness: Having all your documents ready to submit can shave weeks off the process. Any delay in gathering documents will extend the timeline.

• Appraisal timing: Waiting for the appraisal report to determine your home value can sometimes hold things up. A smooth appraisal speeds things along.

• Loan program: Specific loan programs like FHA loans require extra paperwork and approvals that add time to the process. Conventional programs are often faster.

• Lender workload: Lenders with heavy workloads or understaffing may move more slowly. A lender with greater capacity can turn around your loan faster.

• State laws: Some states limit how quickly lenders can process loans or impose extra requirements. This stretches out the timeline.

Tips for a Faster Home Equity Loan

If getting your cash as quickly as possible is a priority, here are some tips that can help expedite the home equity loan process:

• Maintain a credit score over 760 to qualify for the best rates and fastest approvals.

• Gather all your required financial documents ahead of time so you can submit a complete application upfront.

• Get pre-approved so some verification work is done before you even apply.

• Shop with an online lender that uses technology to speed up the process.

• Choose a loan amount below $150K that may require less scrutiny.

• Select a conventional loan program rather than FHA or other government loans.

• Hire an appraiser yourself to ensure that part of the process goes smoothly.

• Avoid states with the most burdensome regulations for lenders.

• Submit your application early in the month when lender workload is lighter.

• Respond quickly to any requests or questions from the lender.

With the right preparation and research, you may be able to get a home equity loan approved and funded in just 2-4 weeks. But it’s important to be realistic and recognize it could take up to 8 weeks when factoring in variables like your financial profile, chosen lender, loan specifics, and legal requirements.

The key is being organized and ready to move through each step of the process efficiently. Work closely with your lender to understand what’s realistic for your situation and how you may be able to expedite certain steps. With a proactive approach, you’ll be tapping into your home equity sooner.