Figure: Review on Home Equity Loans and HELOCs

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Good for unique product offering
Figure
Figure
Good for unique product offering
Figure
  • Products offered:
    Non-traditional HELOC
  • Home equity loan terms:
    N/A
  • HELOC terms:
    5, 10, 15, or 30 years
  • Maximum LTV:
    95%

NextAdvisor’s Take

Pros
  • Wide nationwide availability
  • Good online user experience
  • 0.75% discount for qualifying customers
  • Flexibility of a home equity loan/HELOC hybrid
Cons
  • Only one product offered
  • Limited price transparency
  • Potentially high origination fee
The Bottom Line

At only three years old, Figure uses a unique combination of technology and banking to provide customers in 41 states with HELOCs. Though officially called a home equity line of credit, Figure’s HELOC product has characteristics of both a traditional HELOC and a home equity loan. Borrowers will withdraw the full line amount (minus the origination fee) at the time of origination. Once they repay the initial balance at a fixed rate, they will be able to make additional draws over a specified draw period. Available line amounts range from $15,000 to $400,000.

A HELOC with Figure has no closing costs, but the borrower will be responsible for an origination fee of up to 4.99% of the initial draw, depending on the state the property is located in and the borrower’s credit profile. You may also have to pay a recording fee if your county requires it. Borrowers may receive a rate discount of up to 0.75%; 0.50% for opting into a credit union membership and 0.25% for enrolling in autopay. 

You can apply for a Figure HELOC 100% online, in only a few minutes, according to the website. You’ll be prompted to fill out some basic personal information, but you may have to wait for your application to be reviewed before you can continue with the application process.

Figure’s main draws are its fast funding — it advertises funding in as few as 5 days — and easy-to-navigate website with an accompanying chatbot. However, its downsides include the fact that you can only fill out the first part of the application before you’re told you must wait for your information to be reviewed before you can continue. In addition, Figure only offers a single product which might not be right for everyone. If you don’t want a unique HELOC/home equity loan hybrid and want to go with a traditional HELOC or home equity loan, you’ll need to find another lender. 

EDITORIAL INDEPENDENCE

As with all of our home equity loan and home equity line of credit (HELOC) lender reviews, our analysis is not influenced by any partnerships or advertising relationships. For more information about our scoring methodology, click here.

Figure Full Review 

Founded in 2018, Figure is an online lender offering home equity lines of credit (HELOCs) in 42 states. With a Figure HELOC, you can take out up to $400,000 and pay off the amount over five to 30 years. A financial technology (fintech) company that relies on blockchain technology, Figure offers a fast HELOC funding time of just five days. 

Figure: Home Equity Loan Products

Figure offers a unique HELOC product that has elements of a home equity loan. When you take out a Figure HELOC, you must draw the entire loan amount upfront, minus an origination fee of up to 4.99%.

You’ll get a fixed interest rate that will stay the same over the life of your loan. After you start paying back your initial loan amount, you can make additional draws if you need extra cash. 

These draws are available for two to five years from your origination date, depending on your loan term. Each additional draw will be assigned a new interest rate, which may be higher than your initial rate depending on market conditions. 

By contrast, most other HELOCs let you draw what you need when you need it. Borrowing a lump sum upfront usually involves taking out a home equity loan, rather than a HELOC. If you prefer this more traditional approach, you may be better off with another lender. 

Figure offers HELOCs between $20,000 and $400,000, depending on your credit score and where you live. Residents of Alaska and Wisconsin, for example, must take out a minimum of $25,001. You can choose repayment terms of five, 10, 15, or 30 years. 

For a Figure home equity line of credit, expect an APR starting between 5.14% and 13%. The lowest APR includes a discount of 0.25% for opting into a credit union membership with one of Figure’s partners and 0.25% for enrolling in autopay. 

Besides a recording fee, you may be responsible for a recording fee and subordination fee, depending on where you live and other factors. Figure doesn’t charge fees for account opening, maintenance, or prepayment. 

Figure: Home Loans Rate and Fee Transparency

Figure offers information on its rates and fees on its website and a detailed FAQ section. It shares the range of starting APRs borrowers can expect, as well as information on how to get a combined APR discount of 0.50%. 

Plus, Figure lets you check your rates online with a soft credit check that won’t hurt your credit. If you decide to move forward with your application, you can fill it out and consent to a hard credit inquiry. 

At this point, you’ll need to wait for Figure’s team to review your application. If everything goes through, you could get your HELOC funds in just five days. Along the way, you can also use Figure’s live chat feature to speak directly with Figure support between 6 a.m. and 6 p.m. Pacific Time.

Note that checking your rates is a form of prequalification and doesn’t guarantee an APR. However, it does give you a sense of what rates you could qualify for. While searching for a HELOC with the lowest interest rate, keep an eye out for any fees that could add to your costs of borrowing. 

Figure Compared to Other Home Equity Lenders

FigurePNC BankU.S. Bank
HELOC HELOC that has elements of a home equity loan Fixed rate HELOCVariable rate HELOC Variable rate HELOCRate-lock HELOC 
Home Equity Loan NoNoYes
States Available42 states 44 states (not available in Alaska, Hawaii, Louisiana, Nevada, Mississippi, South Dakota)47 states (not available in Texas, Delaware, or South Carolina)​​
Loan Amount Range$20,000 – $400,000$10,000 – $1,000,000$15,000 – $750,000 (up to $1,000,000 for properties in California)
HELOC Loan TermsCan make additional draws within 2 to 5 years of your origination date. Repayment terms of 5, 10, 15, and 30 year Repayment period of 5 – 30 years (5 – 20 years in Tennessee)10-year draw period; repayment period unspecified
Max LTV70% – 95%, depending on lien position 89.9% (80% or 85% in some states)80%

How to Get the Best Home Equity or HELOC Rate  

From banks to credit unions to online fintech companies, there are a variety of lenders offering HELOCs and home equity loans. These tips can help you narrow down your options and find the right lending solution for you.  

Research Products Offered 

Some lenders offer HELOCs, others provide home equity loans, and some fund both. As explained above, Figure offers a sort of hybrid line of credit that combines elements of both products. 

Typically, a HELOC is a line of credit that you can draw on as needed and pay it off as you go. Lenders often attach variable interest rates to HELOCs, though some provide fixed rates or the option to switch from one rate type to the other. 

A home equity loan, on the other hand, typically funds a lump sum upfront that you pay off in monthly installments over time. You’ll get a fixed interest rate and pay the same amount each month for a specified period of time. 

Figuring out which product you need, whether it’s a HELOC or home equity loan, can help you narrow down your list of lenders. 

Shop for Multiple Lenders 

When pursuing a HELOC or home equity loan, it’s always a good idea to shop around. By comparing your options, you can find a loan with the lowest rates and fees. 

Some lenders let you check your rates online with no impact on your credit. If you need to submit a full application to see your rates, try to keep these hard inquiries within a 45-day window to protect your credit

Keep an eye out for any available discounts, too. Some lenders offer a rate cut to banking customers or borrowers who enroll in autopay. 

Estimate Your Costs of Borrowing 

As you compare funding options, use a loan calculator to estimate your monthly payments and long-term interest costs. While one loan might have a lower interest rate than another, it could cost more if it comes with higher fees. 

Use a calculator to determine the right repayment term for your budget. A longer term may come with lower monthly payments, but it will also lead to higher interest costs in the long run. Try to strike a balance between keeping your monthly bills affordable and your interest charges low. 

Only Borrow What You Need 

Some lenders let you borrow up to 90% or 95% of the equity you hold in your home, but that doesn’t mean you have to max out your loan amount. Overborrowing is risky, since you could lose your home if you miss payments. 

If your home value drops, furthermore, you could end up owing more than your home is worth, known as being underwater. Consider your loan amount carefully, and avoid borrowing more than you need from your home equity. 

Improve Your Credit Score

Taking steps to improve your credit score before you apply for a home equity loan or HELOC could help you qualify for the best rates. Lenders assign the lowest rates to borrowers with the strongest credit profile.

Some lenders also let you borrow more if you have a good score. With Figure, for instance, you need a score of 760 or higher to access its highest HELOC amount of $400,000.  

Some steps you can take to boost your credit score include making on-time payments on debts, paying down your amounts owed, and lowering your credit utilization ratio, or the amount of credit you use compared to what’s available to you. You should also check your credit report regularly, and if you see any reporting errors, try disputing them with your creditors or the credit bureaus to get them removed from your credit history.