How Long Does it Take to Get Home Equity Loan

Jun 5, 2024

When homeowners consider leveraging their home’s equity, understanding the basics and timelines of home equity loans becomes very important. Essentially, a home equity loan allows you to borrow against the value of your home, providing a lump sum of cash that can be used for large expenses such as home renovations, debt consolidation, or college tuition. 

But how long does it take to actually receive the funds once you’ve decided to take this step? Knowing this timeline is crucial for planning your financial strategies and aligning the loan approval with your immediate financial needs.

Table of Contents

How Long Does it Take to Get Home Equity Loan

  1. What Is a Home Equity Loan?
  2. How Long Does the Home Equity Loan Process Typically Take?
  3. Step-by-Step Breakdown of the Home Equity Loan Process
  4. What Can Speed Up Your Home Equity Loan Approval?
  5. Closing the Deal: What to Expect?
  6. Common Delays in the Process
  7. FAQs

What Is a Home Equity Loan?

Home equity loans and home equity lines of credit (HELOC) are two sides of the same coin but both are secured by your home’s value and differ significantly in how you access the funds and repay them. A home equity loan provides a single lump sum and typically features a fixed interest rate and a set repayment term. This makes it an excellent option for those who need a specific amount upfront and prefer the predictability of fixed monthly payments.

In contrast, a HELOC works more like a credit card, giving you a credit line to draw from as needed with a variable interest rate. This flexibility makes it suitable for ongoing expenses where the total cost may not be known upfront.

The choice between these options often boils down to your financial situation and the specific needs you aim to meet. For instance, would you prefer a predictable repayment plan, or does the flexibility of a revolving credit line better suit your projects and cash flow?

how long does it take to get home equity loan

How Long Does The Home Equity Loan Process Typically Take?

The duration from application to funding for a home equity loan can generally range from a few weeks to a couple of months, influenced by several factors. The typical process timeline provided by financial institutions like Discover suggests an average of about 45 days from application to closing. However, this can vary widely based on the lender, the complexity of your financial situation, and even the efficiency of your responses during the application process.

In real-world applications, many borrowers find that being well-prepared can significantly speed up the process. For example, John, a homeowner in Texas, mentioned that having his documentation ready and responding quickly to the lender’s requests helped him secure his loan in just under a month. 

Step-by-Step Breakdown of the Home Equity Loan Process

To secure a home equity loan, the first step is understanding and gathering the essential documentation required for the home equity loan application. This typically includes your mortgage statement, recent pay stubs as proof of income, tax returns, and a statement of your debt to income ratio. Each piece of documentation plays a crucial role in painting a clear picture of your financial health.

Tips for a smooth application process

Before you even fill out an application, ensure you have all your documents in order. This includes your latest mortgage statement, which reflects your outstanding loan amount and terms.

Check your credit score. Your credit score significantly impacts your eligibility and the interest rate you will receive. Knowing your score beforehand helps you understand the likelihood of approval.

Calculate the equity in your home as this is the portion of your property you truly “own.” Is it enough to meet the lender’s requirements?

mortgage documents with money

What Can Speed Up Your Home Equity Loan Approval?

Efficient documentation and preparedness can significantly reduce the timeline of your home equity loan process. Utilizing digital tools and online applications also streamline the process, allowing for quicker submission and easier tracking of your application status.

Here are two ways to expedite the approval process:

  1. Digital document submission. Many lenders now offer portals where you can upload your financial documents securely.
  2. Some lenders provide options for pre-approval, which can give you a headstart in the loan process by assessing your eligibility early.

Closing the Deal: What to Expect?

Reaching the closing phase is an exciting moment. Here, you will finalize the loan terms and sign the necessary documents to receive the funds. Understanding the closing costs associated with your home equity loan is crucial as these can impact your overall loan expense.

Review of closing documents and make sure you understand every aspect of the loan agreement while closing documents. Then, signing of documents which typically happens in the presence of a notary or loan officer. Be prepared for any potential delays. Sometimes, last-minute verifications or document reviews can push back the funding schedule.

a women signing on the loan papers

Common Delays In the Process

Going through the home equity loan process can sometimes feel like steering through a series of checkpoints, each with its potential delays. Understanding what these roadblocks can be and how to sidestep them is important for a smooth journey from application to closing.

One common delay in the home equity loan process arises from issues with documentation. Incomplete or incorrect submissions can significantly hold up the process. For example, if an applicant forgets to include a key financial document or provides outdated information, the lender will need to request these documents again, adding time to the approval process. 

Another typical slowdown is related to the property appraisal. An appraisal is essential as it determines the current market value of your home, which in turn affects the loan amount. Delays can occur if there are not enough appraisers available, or if the appraisal scheduling does not align quickly with your timeline. 


  • Can I get a home equity loan with a bad credit score?

Yes, it’s possible to obtain a home equity loan with a bad credit score, but you may face higher interest rates and stricter loan terms. Lenders typically look for a minimum credit score of 620 but may accept lower scores with additional collateral or higher equity in the home.

  • Is there a minimum home equity amount required to get a loan?

Generally, lenders require you to have at least 15-20% equity in your home to qualify for a home equity loan. This percentage can vary based on the lender’s policies and your financial profile.

  • Can I deduct the interest paid on a home equity loan from my taxes?

Yes, the interest paid on home equity loans is often tax-deductible if you use the loan for home improvements or to buy, build, or substantially improve the taxpayer’s home that secures the loan. It’s advisable to consult with a tax professional to understand your specific situation.

  • What happens if I sell my house with a home equity loan?

If you sell your house, you must pay off the home equity loan immediately from the proceeds of the sale. The remaining funds after paying off the mortgage and the home equity loan will be yours.

  • Are there any alternatives to a home equity loan if I need cash?

Yes, alternatives include personal loans, which don’t require home equity; cash-out refinancing, where you refinance your mortgage for more than you owe and take the difference in cash; and a Home Equity Line of Credit (HELOC), which provides flexible access to funds up to a certain limit rather than a lump sum.


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About Rob Sturms

With over three decades of experience, Rob Sturms is a trusted name in Colorado’s mortgage industry. Since 1993, he has been guiding clients with honesty and expertise through various loan options, ensuring personalized solutions for each homeowner’s journey. As the founder of Rob’s Mortgage Loans, Rob’s commitment to transparency and tailored service makes him the go-to choice for reliable lending assistance.

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