How long is the HELOC process?

[Andrew B.]

Hello all. I am currently saving up for my first investment property and doing research while I wait. Once I am ready to dive in, I plan on getting a HELOC on my primary residence to fund any rehab and assist with reserves for emergency. However, my question is, if I find a place I want to jump in on sooner than I expect, I will not have the HELOC yet.

What are your experiences getting a HELOC? How long did it take? I don't want to find a gem of a deal, and lose it because I have to wait for a HELOC, but I also don't want to pay fees until I am ready to get it. Any suggestions for banks to use and what % you were able to pull is helpful as well.

Thank you

[Jennifer T.]

My HELOC is an instrumental part of my investing. I love their flexibility.

It will depend on your bank, but I'd guess 4-5 weeks.  Shop around with a few banks for interest rates, specials, and how long the process takes. 

I ended up getting my HELOC with the same bank I have that mortgage with. That actually made it a little less complicated, because they already had all the info on my house, ie insurances and taxes. They could also see that I'd always been on time with my mortgage. So, all things equal, I'd look at your own bank first. But a bit of convenience shouldn't necessarily outweigh a better interest rate or processing time with a different bank.

It's a long story I won't go into, but I was in a bit of a pickle last year. I was under contract and had already paid non-refundable earnest money for a duplex I won in an auction. Two weeks before closing, I got a call from my banker (at a different bank) that their underwriting department had flooded and they had no idea when they could close my loan. They had already been hugely botching things. I decided to buy the house with cash, using my HELOC. Except I didn't have quite enough available. The seller would only give me one extra week to close. I had three weeks total for a solution. Not enough time to start from scratch with another bank.

I threw myself on the mercy of the loan officer who had helped me originally get my HELOC a year or two earlier. They weren't able to change the LTV but told me, if my house had appreciated enough in value, they could write me a new and bigger HELOC. And, it was cutting it close, but they could do it in 3 weeks since I already had the HELOC with them. Serious nail biting, but they did it and I closed on the property.