How long does it take to get a home equity loan? A homeowner’s guide

Receiving a home equity loan involves multiple steps, from applying and appraising to underwriting and closing. While most borrowers complete the process within two to eight weeks, factors like your lender’s process and your financial profile can affect this timeline.

Read on to explore how long it takes to get a home equity loan and how Better can help you unlock your home’s equity faster.

When can you get a home equity loan?

For most lenders, the amount of equity you have matters more than how long you’ve had it. Typically, you’ll need at least 20% equity in your home to qualify for a home equity loan or a home equity line of credit (HELOC), along with a good credit score. However, some lenders may accept less if you have an excellent credit profile.

There’s generally no waiting period for second mortgages, but the rules for refinancing are different. For example, most cash-out refinance options require you to wait six to 12 months before applying. This is known as the mortgage seasoning requirement.

How long does it take to get a home equity loan? 6 stages

How fast you can get a home equity loan or HELOC depends on how quickly you can gather the required documents and choose a lender. The lender’s processing speed also comes into play.

Here’s a look at each step in the home equity loan process and typical timeframes.

1. Get pre-approved (1–3 days)

The first step in the home equity process is finding out what kind of loan terms you might qualify for. With most lenders, pre-approval takes one to three days. With Better, it takes as little as three minutes, thanks to a fully digital application that gives you a quick estimate of your borrowing power and potential loan terms.

When a lender pre-approves you, it gives you a sense of how much you can borrow and the interest rate you might receive. You’ll need to provide financial documents to verify your income, such as recent pay stubs or bank statements, your most recent tax return, and W-2 forms.

The lender will also check your credit score and credit report to assess eligibility. After submitting your information, you’ll receive an estimate of how much equity you can access and an approximate equity loan rate. These numbers may change after the full underwriting process.

If the estimated mortgage terms aren’t what you’re hoping for, don’t worry. Pre-approval doesn’t commit you to a loan or cost you money.

And if you’re considering a HELOC instead of a traditional home equity loan, Better’s One Day HELOC option can give you conditional approval within 24 hours and access to funds in as little as a week.

...in as little as 3 minutes – no credit impact

2. Shop around (7–10 days)

Once you have a pre-approval letter, you’ll know how much you can borrow and the interest rates available. Normally, this step means comparing lenders one by one and waiting for their responses, which can take time.

Better makes it simple. With access to a wide investor network, we do the shopping for you and surface highly competitive rates faster, so you don’t have to juggle multiple lender conversations on your own.

3. Fill out the application (less than 1 day)

After choosing a lender, you’ll complete and submit an official loan application. This step is more detailed than pre-approval. You’ll provide personal information such as your name, Social Security number, employment details, and documents to verify your income. Most lenders will also ask about existing debt, including your primary mortgage.

4. Get a home appraisal (2–10 days)

Once the lender has your application, they’ll arrange for a professional appraisal to determine your property’s current market value. This number helps the lender figure out exactly how much equity you can borrow. The actual on-site appraisal usually only takes about 30 minutes, but it can take up to 10 days for the lender to process and review the report.

5. Wait for underwriting (1–4 weeks)

After the appraisal, the lender moves to underwriting, which is a full review of your finances to assess risk and finalize the loan terms. Because a home equity loan or HELOC uses your property as collateral, this step is more detailed than most personal loans, making it the longest part of the process. Underwriting can take up to 30 days or possibly longer if anything requires further investigation. Responding quickly to follow-up questions or requests for additional documentation keeps things moving.

###6. Review and close (less than 1 day)

When it comes to how long a home equity loan takes to close, the signing appointment itself is fast, typically just a few hours. However, because of the federal three-day cancellation rule (right of rescission), the mortgage won’t be official until 72 hours after you sign, giving borrowers the option to cancel without penalty during that window.

At this stage, you’ll review the final loan terms and sign the documents with a public notary present. In some states, an attorney may also be present.

How long does it take to get funds from a home equity loan?

Most borrowers receive funds shortly after closing, often within three business days. But the overall home equity loan waiting period can vary based on several factors.

Type of lender

Not all lenders move at the same pace. A traditional bank or credit union may take longer than an online provider using digital tools. For example, Better uses automated valuation models (AVMs) and a pre-approval process that can take as little as three minutes.

...in as little as 3 minutes – no credit impact

Loan terms

Larger loan amounts often mean more detailed underwriting. That extra scrutiny can add days to the process before you receive your line of credit or loan funds.

Your financial health

Signs of risk, such as a low credit score, high debt-to-income or loan-to-value ratio, or patchy employment history, can slow down the review as the lender takes a closer look at your loan application.

The appraisal

Applying for a home equity loan or HELOC during busy times of year or in rural locations with fewer appraisers can mean waiting longer for the lender to schedule and complete a home appraisal.

Paperwork errors

Small mistakes or missing documents can put things on pause while you send in corrections.

Title issues

Liens, unpaid property taxes, or other red flags in the title search can also lengthen the time it takes the lender to finalize the loan.

How to speed up your home equity loan approval

Want to shorten the timeline for when you can get a home equity loan? Start by researching lenders and choosing one whose requirements align with your financial profile. Applying to lenders with criteria you don’t meet only slows the process and wastes time.

Improving your credit profile can also help. Lenders evaluate several factors when deciding whether to approve a loan and what terms to offer. Strengthening these areas makes you more attractive to lenders and can reduce delays when applying:

— Credit score: Your credit score shows lenders how well you’ve managed your debt over time. A higher score increases your chance of approval and may qualify you for better loan terms with a lower interest rate.

— Debt-to-income ratio: This measures how much of your monthly income goes toward paying down debts. A lower ratio shows the lender that you have enough income left to comfortably handle a second mortgage.

— Loan-to-value ratio: This compares your remaining mortgage balance with your home’s market value, showing how much equity you’ve built.

— Income: Lenders want to see that you have sufficient income to manage monthly payments on a second mortgage without financial strain.

Get a home equity loan faster with Better

Traditional home equity loans can take up to two months to close. Better moves much faster. You can close in as little as three weeks after submitting your application, which takes about three minutes to complete, and access your funds in as little as a week.

Start your pre-approval to see what you qualify for, and take the first step toward unlocking your home’s equity.

...in as little as 3 minutes – no credit impact