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How quickly can you close on a home equity loan?

House sitting on pile of dollar bills
Knowing how long it takes to close on a home equity loan can be useful — especially if you need access to the funds in the near future. Getty Images

Home equity loans can be a valuable financial tool for homeowners looking to tap into the equity they've built in their homes. Whether you're considering a home improvement project, debt consolidation or covering unexpected expenses, a home equity loan can provide you with access to cash at a lower interest rate compared to many other types of loans. 

And, right now, the average homeowner has about $199,000 in tappable home equity, which means it's a great time to consider this type of loan if you need funds. But in some cases, you may need the money from a home equity loan sooner rather than later — whether it's to cover a large emergency expense, a costly home repair or something else entirely. 

If that's the case for you, it can be helpful to know the timeline for home equity loan closings — and how quickly you can close on a home equity loan.

Find out the home equity loan rates available to you here.

How quickly can you close on a home equity loan?

Closing on a home equity loan can take anywhere from a few weeks to a couple of months on average, as there are various factors that play a role in the timing. The factors that can impact the closing timeline include all of the following: 

Lender's policies and processing times 

Different home equity lenders may have varying policies and processing times for their loans. Some lenders are known for their efficiency and may offer quicker closing times, while others may have a more lengthy and bureaucratic process.

Explore your home equity loan options here.

Documentation and paperwork 

The speed of your home equity loan application largely depends on how quickly you can provide all the necessary documentation and paperwork. This includes documents such as proof of income, tax returns, property appraisals and insurance information. Being organized and responsive can significantly expedite the process.

Property appraisal 

In many cases, lenders require a professional appraisal of your property to determine its current market value. The timeline for scheduling and completing the appraisal can vary depending on the availability of appraisers in your area.

Credit history and financial health 

Your credit score and financial history also play a role in the closing timeline. If you have a strong credit profile and a stable financial history, you may be seen as a lower-risk borrower, which could speed up the approval process.

Loan amount and lender workload 

The size of the loan you're applying for and the lender's current workload can further impact the timeline. Larger loan amounts may require more extensive underwriting, which can take longer. Additionally, if the lender is experiencing a high volume of loan applications, it could result in delays.

How to expedite the home equity loan closing process

While some factors affecting the closing timeline are beyond your control, there are steps you can take to expedite the home equity loan closing process, including:

  • Research lenders: Before applying for a home equity loan, research different lenders and their closing timelines. Choose a lender known for their efficiency and customer service.
  • Gather documentation early: Start collecting the necessary documents and paperwork well in advance of applying for the loan. Being prepared will help you submit a complete application promptly.
  • Improve your credit: If your credit score needs improvement, take steps to boost it before applying for the loan. A higher credit score can lead to a faster approval process and better loan terms.
  • Communicate with your lender: Stay in close communication with your lender and respond promptly to any requests for additional information or documentation. Open lines of communication can prevent unnecessary delays.
  • Consider a local lender: Local banks or credit unions may have shorter closing times because they may have fewer loan applications to process and a more streamlined approach.

The bottom line

The timeline for closing on a home equity loan varies, sometimes significantly, depending on any number of factors. In most cases, it can take a few weeks to a few months to close on your loan, but there are steps you can take to expedite the process, like choosing your lender wisely and staying proactive in your communication with the lender. By taking these steps, you may be able to ensure a quicker turnaround time — and faster access to your home equity loan funds.

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