LoanDepot HELOCs: 5 details you should know

Written by: Kat Tretina
• Updated •3 min read
This date may not reflect recent changes in individual terms.
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In a Nutshell

LoanDepot offers relatively quick closing on HELOCs, but be aware of origination fees and variable interest rates.
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LoanDepot HELOC at a glance

  • Fixed or variable rate: Variable
  • How to withdraw funds: ACH/wire
  • Origination fee: Up to 5%
  • Loan-to-value ratio: Not disclosed
  • Time to fund: As little as three weeks

LoanDepot has been in operation since 2010. Previously, it focused on home mortgages, but in 2022, it launched a new home equity line of credit, or HELOC, product. LoanDepot offers HELOC amounts between $35,000 and $250,000.

Pros

  • Close in as little as three weeks
  • Check your rate without affecting credit score
  • Interest-only payments for the first 10 years (except Texas)

Cons

  • Charges origination fees
  • Not available in all states
  • No fixed-rate option

5 things to know about a LoanDepot HELOC

Before you apply for a LoanDepot HELOC, there are a few details you should know.

1. You can view rates without affecting your credit

With LoanDepot, you can check your eligibility and view potential rates online. According to the company, it only takes a few minutes to get a quote, and the process doesn’t affect your credit score.

2. LoanDepot HELOCs have one term

All LoanDepot HELOCs have 30-year terms. If you get a HELOC through LoanDepot, you can make interest-only payments for the first 10 years (except Texas). And for the remaining 20 years, you’ll pay full interest and principal payments. LoanDepot’s HELOCs have a three-year draw period within the 10-year interest-only repayment period.

3. LoanDepot HELOCs have variable rates

Some banks offer fixed-rate HELOCs. A fixed-rate HELOC can be appealing because the rate never changes, so you wouldn’t have to worry about inflation or market changes potentially increasing your monthly payments.

But LoanDepot doesn’t have that option. Its HELOCs are variable, with a maximum APR of 18%. With a variable rate, your payments could change over time — increasing (or decreasing) in line with the prime rate.

4. The HELOC process is not 100% digital

LoanDepot boasts a digital application experience, with no need to visit a bank branch. But the HELOC application isn’t completely digital. You must connect with a local notary in person to complete the application — remote online notarization isn’t an option with LoanDepot.

5. LoanDepot HELOCs aren’t available in all states

LoanDepot’s HELOC product isn’t available in every state, so check with the lender to see if you’re eligible in your location before you complete an application.

How long does it take to get a HELOC from LoanDepot?

With most HELOCs, it can take several weeks to close. With LoanDepot’s HELOCs, you can close in as little as three weeks, depending on whether certain verification is required. That timeline may make it a good option for people who need to access HELOC funds relatively quickly.

Who is a LoanDepot HELOC good for?

A LoanDepot HELOC may be a good fit for homeowners who have established home equity and need funding within a few weeks to cover somewhat urgent expenses. Since the lender advertises closing times for some borrowers within three weeks, look to this lender if LoanDepot’s relatively quick closing times seem advantageous to you compared to other lenders.

How to apply for a LoanDepot HELOC

To apply for a LoanDepot HELOC, follow these steps.

  1. Ensure you have enough equity in your home. ThoughLoanDepot doesn’t disclose its minimum equity requirements, you generally need to have paid off 15% to 20% of your home’s total value to qualify for a HELOC.
  2. Check your rates. You can use LoanDepot’s Check My Rate tool to view potential rates without affecting your credit score.
  3. Fill out the application. If the loan terms work for you, you can complete the application online. LoanDepot will ask you for details about your home, employment and other personal information. It’ll also ask you to consent to a hard credit check.
  4. Visit a notary. While most of the application process is digital, you must visit a notary in person before you can close on the HELOC.
  5. Wait for closing. LoanDepot HELOCs can close in as little as three weeks. After that, you’ll have three years to draw money from the HELOC.

Not sure if LoanDepot is right for you? Consider these alternatives.

  • Bank of America HELOC — With a Bank of America HELOC, you can access up to $1 million.
  • Figure HELOC — If you’re in a bind and need money as quickly as possible, Figure’s HELOC provides funding in as little as five days.

About the author: Kat Tretina is a personal finance writer with a master’s degree in communication studies from West Chester University of Pennsylvania. Obsessed with her many side hustles, she focuses on helping people pay down their … Read more.