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Home equity loans offer notable financial advantages in today’s economy. With interest rates lower than credit cards and personal loans, they provide an affordable way to access large sums when life throws curveballs your way.
The challenge? Traditional home equity products take time to process. Home equity loans, home equity lines of credit (HELOCs) and cash-out refinances typically require two weeks to two months before funds become available. This timeline becomes problematic when you’re facing a sudden job loss, unexpected medical bills or home repairs that can’t wait.
Fortunately, there are ways to expedite access to your home’s equity, which lending professionals detail below.
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How to borrow home equity quickly, according to experts
“The fastest way to access home equity is to prepare before you need it,” emphasizes Joe Perveiler, senior vice president and home lending executive at PNC Bank. “Get pre-approved early and have key documents [such as] income verification and mortgage statements ready.”
With this proactive approach in mind, let’s explore the expert-recommended strategies to secure your funds when time is of the essence:
Work with a trusted mortgage professional to identify the right loan program
“First, reach out to a mortgage professional [who can] help you understand your options based on your financial goals,” advises Debbie Calixto, sales manager at mortgage lender loanDepot. This expert will assess your home’s market value and calculate your available equity. They’ll also determine whether a home equity loan, HELOC or cash-out refinance best suits your needs:
- A home equity loan works well if you need a one-time lump sum for major expenses such as home renovations or debt consolidation, with predictable fixed-rate payments.
- A HELOC is ideal if you want flexible, ongoing access to funds for varied expenses over time. It’s similar to a credit card but with lower interest rates.
- A cash-out refinance makes sense when current rates are lower than your existing mortgage, and you want to simplify with a single payment while accessing equity.
Calixto also recommends discussing turnaround times with your lender. “The timeline from the initial conversation to loan closure averages 30 days. [But] some lenders may process loans more quickly or slowly,” she says.
Determine how quickly you could borrow home equity here now.
Explore digital automated online solutions
“Digital solutions have reduced the processing time to as little as two days to close, and five days to fund,” says Jay Sobo, president of Liberty Financing LLC. These platforms use electronic income verification, transforming what was once a tedious multi-week process into an almost instantaneous one.
Use an automated valuation model (AVM)
When time is limited, asking potential vendors about their AVM policies could be the difference between getting funds in days versus weeks. “Many offer AVMs in place of appraisals for loan amounts under $250,000, and sometimes up to $400,000 or more,” explains Sobo. These computer-generated home valuations eliminate the need for an appraiser to visit your property.
Combine electronic income verifications with AVMs
For maximum speed, find lenders offering electronic income verification and automated valuations. “This lets [you] skip the paperwork and appraisal, resulting in home equity loans that fund in as little as five days,” highlights Sobo.
Issues that delay home equity access (and how to avoid them)
Be mindful of these common pitfalls that delay home equity access:
- Verification of employment challenges: “Some employers can be hard to get a hold of. This risk is [higher] if you’ve had many employers over the past two years,” says Sobo. Provide a detailed list of employers (and their contact information) and alert your HR department to expect verification requests.
- Missing documents: “The most common reason for delays is a borrower taking too long to gather necessary documents or sign required disclosures,” notes Calixto. Have your mortgage statement, insurance declaration, pay stubs, W-2s, tax returns and bank statements ready before applying. During the process, respond promptly to all requests to avoid holdups.
- Title issues: “Encumbrances on your property can cost time if they’re not disclosed,” warns Sobo. Perveiler adds that “unresolved liens, [such as] legal claims against the property for unpaid taxes or contractor fees” frequently cause delays. Address these issues before applying.
- High debt-to-income ratios: According to Perveiler, excessive debt relative to income can slow approval. Pay down some debts before applying to improve your ratio and speed up the process.
The bottom line
Accessing your home equity quickly is possible with the right preparation and strategy. “Strong credit can make the approval faster and may [get you] better loan terms,” says Perveiler. He suggests reviewing your credit reports for errors, paying bills on time and reducing debt in the months before applying. Besides that, contact at least three lenders to compare their digital capabilities, AVM policies and processing times. Proper research and planning today ensures you’ll have access to your home’s value when you need it most.
Learn more about your home equity loan options online today.
