Loan Depot's Heloc Options: What You Need To Know

LoanDepot offers a Home Equity Line of Credit (HELOC) in most US states. The loan is available in amounts ranging from $35,000 to $250,000 and has a variable interest rate. The application process is digital, but it requires an in-person notary to complete. The loan has a 30-year term, including a three-year draw period and a 20-year repayment period. During the first 10 years, borrowers make interest-only payments, and for the remaining 20 years, they pay full interest and principal payments.

LoanDepot HELOC availability

LoanDepot offers Home Equity Lines of Credit (HELOC) to borrowers in most US states. The amount accessible through a HELOC ranges from $35,000 to $250,000, with a variable interest rate and a 30-year term. The application process is online, but it requires an in-person notarization to finalize the loan.

The HELOC functions similarly to a credit card, allowing borrowers to access funds as needed, up to their credit limit, during the three-year draw period. The minimum monthly payment during the first three years is interest-only, which is followed by a 27-year repayment period. It is important to note that the interest rate may change over time, causing the monthly minimum payment to fluctuate.

To apply for a LoanDepot HELOC, borrowers must have enough equity in their home, typically requiring 15% to 20% of the home's total value to be paid off. While LoanDepot does not disclose its minimum equity requirements, borrowers can use their Check My Rate tool to view potential rates without affecting their credit score. The entire application can be completed online, and the process typically takes between two to six weeks.

LoanDepot's HELOCs are not suitable for those seeking a long-term solution, as the draw period is only three years, compared to the ten years offered by many other companies. Additionally, LoanDepot's high origination fees, lack of an introductory APR, and absence of advertised rates have been cited as drawbacks.

Application process

The application process for a LoanDepot HELOC is mostly digital and can be completed from the convenience of your home. However, remote online notarization is not available, so you will need to connect with a notary in person to complete the process. Here is a step-by-step guide to the application process:

Check Your Eligibility:

Before starting the application process, it is essential to ensure you meet the basic requirements for a HELOC. You will need to have sufficient equity in your home, typically requiring you to have paid off 15% to 20% of your home's total value. Additionally, you will need to meet credit score requirements, which is usually a minimum credit score of 650-680.

Check Your Rates:

LoanDepot offers a "Check My Rate" tool that allows you to view potential rates without impacting your credit score. This step will help you understand the loan terms and determine if they work for you before proceeding with the full application.

Gather Application Materials:

You will need to provide various documents and information during the application process. This includes your Social Security number or other identification, salary, employment information, and estimated home value. You should also have details about your home's outstanding mortgage balance.

Complete the Application:

The LoanDepot application can be filled out online. You will be asked to provide details about your home, employment, and other personal information. As part of the application, you will need to consent to a hard credit check, which will impact your credit score.

Visit a Notary:

While most of the application process is digital, the final step before closing on the HELOC is to visit a notary in person. LoanDepot will arrange the notary services and provide them to you.

Wait for Closing:

LoanDepot HELOCs can close in as little as three weeks. After closing, you will have three years to draw money from the HELOC.

Funding timeline

LoanDepot HELOCs can close in as little as three weeks. After that, you will have three years to draw money from the HELOC. This is a relatively quick closing time compared to other lenders. For example, Figure's HELOC provides funding in as little as five days, but Bank of America's HELOC can take longer.

LoanDepot's HELOC has a variable interest rate/APR based on an index (WSJ Prime Rate) plus a margin set by the lender. The interest rate will not exceed 18.00% at any time during the term of your account. The monthly payment amounts are estimates based on the interest rate and balance input in the calculator. As your interest rate and balance may change, the monthly minimum payment due may also fluctuate.

Interest rates and fees

The loanDepot HELOC has a variable interest rate/APR based on an index (WSJ Prime Rate) plus a margin set by the lender. The rate/APR will not exceed 18.00% at any time during the term of your account (could vary based on limits imposed by state law). The minimum monthly payment during the first 3 years is interest-only and is fully amortized over 324 months during the repayment phase. For all other states, the HELOC has a 30-year term which includes a 3-year draw period (within a 10-year interest-only period) and a 20-year repayment period. The minimum monthly payment during the first 10 years is interest-only and is fully amortized over 240 months during the repayment phase.

The origination fee will be up to 5% of the line amount, or the maximum allowed by state law, whichever is less, and will vary based on product qualification. There are no third-party fees, and the minimum payment will be at least $100. Lines less than $50,000 require a 100% draw (minus the origination fee) at loan funding. No additional draws may be taken for 90 days following the closing date.

You can check your eligibility and view potential rates online. According to the company, it only takes a few minutes to get a quote, and the process doesn't affect your credit score. The application process is digital, but remote online notarization is not available. You will need to connect with an in-person notary to complete the process.

LoanDepot's reputation

LoanDepot is a large national lender based in Irvine, California, and licensed to fund loans in all U.S. states. It offers an end-to-end digital process with in-person assistance at over 200 branches across the country. The company provides a variety of loan options, including home purchase mortgages, refinancing, and personal loans. LoanDepot also offers free credit score monitoring and a Lifetime Guarantee program that waives lender fees for repeat customers.

LoanDepot has received mixed reviews from customers and independent reviewers. On Trustpilot, the company has a "Great" rating with over 4,000 customer reviews. Similarly, Bankrate describes LoanDepot as having an "above-average reputation in most regards," with positive reviews highlighting the company's professional and knowledgeable staff, quick loan turnaround, and flexibility. Additionally, LoanDepot has an A+ rating from the Better Business Bureau.

However, LoanDepot scored below average in J.D. Power's 2023 Mortgage Origination Satisfaction Study. Some customers have described the company's staff as "pushy" and complained about commitments that weren't kept. The company's lack of transparency around APRs has also been mentioned as a concern, with NerdWallet giving LoanDepot a rating of 3.4 out of 5 stars in this category.

In terms of its HELOC (Home Equity Line of Credit) offering, LoanDepot provides a convenient digital application process, allowing customers to check their eligibility and view potential rates online without impacting their credit score. LoanDepot's HELOCs have a variable interest rate structure, with a maximum APR of 18%. The company offers relatively quick closing times, with funding available in as little as three weeks. However, it's important to note that LoanDepot does not offer fixed-rate HELOCs, and there may be origination fees of up to 5% associated with their HELOCs.

Frequently asked questions