Figure HELOC Review 2024
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Our Take
4.5
Figure’s HELOC up to $400,000 stands out for its fast closing (funding can be accessed within five days of applying) and for allowing lines of credit for second homes.
Borrowers will have to take out their full loan balance at closing, minus an origination fee, with the option to make additional withdrawals as they pay it off. All draws have a fixed interest rate. Figure’s draw period of two to five years is much shorter than what most lenders offer.
Pros
- Specializes in HELOCs.
- The initial balance and any additional draws have a fixed interest rate.
- Closing may be available in just five days.
- HELOCs are available for second homes.
Cons
- Short draw period of two to five years.
- Requires a $20,000 minimum initial draw.
- Lender charges origination fees.
Lender | Max. loan amount | Max LTV | Min. credit score | |
|---|---|---|---|---|
$400,000 | 85% | 640 | Visit Lenderat Figure at Figure | |
$750,000 | 80% | 580 | Visit Lenderat New American Funding at New American Funding | |
$350,000 | 80% | 680 | Visit Lenderat Rocket Mortgage, LLC at Rocket Mortgage, LLC |
Full Review
Figure HELOC rates and discounts
Most home equity line of credit, or HELOC, interest rates are indexed to a base rate called the prime rate. The annual percentage rate, or APR, that you’re offered will include a margin the lender has added to the prime rate. Offered margins depend largely on factors like your credit score, your existing debt and the amount you wish to borrow, but they will vary by lender.
Current prime rate | Prime rate last week | Prime rate in the past year — low | Prime rate in the past year — high |
|---|---|---|---|
8%. | 8%. | 8%. | 8.50%. |
Figure does not post sample rates on its website; borrowers have to begin an application in order to access customized rate offers. Unlike a typical HELOC, which has a variable rate, Figure’s HELOC has a fixed rate. This could make it a solid choice for borrowers who value predictable future payments.
Borrowers may be eligible for a discount of 0.25 percentage points for enrolling in autopay or for joining Teachers Federal Credit Union, Quorum Federal Credit Union or Valley Strong Credit Union.
Applying for a Figure HELOC
The application can be completed entirely online, and borrowers will be asked to provide details about the property, annual income and contact information. The application can be accessed by clicking the “find my rate” button on the lender’s site. Borrowers in the state of New York are not eligible.
Figure uses an “eNotary” to verify the borrower’s identity via video chat, which the lender says can be completed in minutes.
The lender’s website has a live chat feature, which is accessible from 6 a.m. to 5 p.m. PST Monday through Saturday. When we tried it out, we were immediately connected to an agent; however, the answers were not as comprehensive as what we found in the FAQ section of the site.
Figure’s customer service line has the same hours of availability as its live chat feature, and borrowers can also email the lender for customer support. Contact information is listed on the FAQ section of Figure’s website.
Some lenders (such as Guaranteed Rate) have partnered with Figure to use its HELOC origination software, though these lenders will set their own requirements and risk assessments.
Opening and using a Figure HELOC
Figure says borrowers can close on their loan and receive funding within five days, though loan applicants have as long as 29 days after their credit has been pulled to complete identity and income verification. Borrowers who live in counties that don’t allow for e-signatures or that require in-person closing can expect a longer timeline than borrowers who complete the entire process virtually.
The maximum loan amount available from Figure is $400,000. Borrowers are required to draw their entire credit limit (minus origination fees) at closing, though they can continue to make additional draws as they pay down the balance. In this way, Figure’s product is similar to a hybrid between a HELOC and a traditional home equity loan, which delivers a lump sum payable at a fixed rate.
At a minimum, any additional draws must be at least $500. Borrowers have only two to five years to make these draws, unlike a traditional HELOC that allows borrowers to make withdrawals up to 10 years after origination. The draw period is determined by the payback term that the borrower chooses:
Five-year term = two-year draw period.
10-year term = three-year draw period.
15-year term = four-year draw period.
30-year term = five-year draw period.
» MORE: Best HELOC lenders
Alternatives to a Figure HELOC
Borrowers interested in getting a HELOC with a fixed rate might be a good fit for PNC Bank, while borrowers who don’t want to take a minimum draw at closing may want to consider TD Bank.
HELOCs offer a flexible way to access home equity over a period of time and pay interest only on the funds you withdraw. However, rising interest rates can bump up your monthly payment, and, as with credit cards, it takes discipline to avoid overspending.
Alternatives to home equity lines of credit include a home equity loan, which offers a lump sum with a fixed rate or a cash-out refinance, which replaces your existing mortgage with a larger loan. Figure’s HELOC shares some characteristics with a home equity loan. The lender does not offer additional loan products.
NerdWallet’s HELOC star ratings are awarded by the editorial team based on the following evaluated factors: combined loan-to-value ratio, lender fees, transparency on key factors, whether a fixed-rate option is available, rate discounts, ease of application, whether a prepayment penalty may apply and whether an initial draw is required.
