The Figure is a fintech company that uses artificial and blockchain technology to streamline its loan origination process. The company offers mortgage refinancing and home equity lines of credit from $15000 to $400000 with terms extending up to thirty years. The interest rates start at 8.75%, including a 0.25% autopay discount, and are comparable to the current national average.

You must have a credit score 640 (minimum) or above to qualify for the HELOC with Figures. However, the company does not charge for maintenance, late payment, prepayment fees, or charge applications. If you are interested in knowing more about Figure, continue to read!

How Does Figure HELOC Work?

The Figure HELOC process begins when the borrower applies to the company website or mobile application. Due to the innovative technologies (automated valuation model and blockchain), the entire process has been streamlined. Blockchain technology creates an unchangeable record of the loan. The traditional methods require the trustees and administrators for manual checking. It is a time-consuming process, and the chances of errors are always higher.

But, with blockchain, the data is securely recorded without any error, which increases the efficiency of the process. Besides that, Figure uses AVM technology instead of in-person appraisal. The model gets an idea about the value of your home from the recent sales, historical trends, and public records to expedite the approval process.

After the valuation of the property, Figure approves the loan quickly. The borrowing limit ranges from $20,000 to $400,000, while the APRs vary from 6.10% to 14.74%. The company also includes a 0.25% rate discount for automated payments. Furthermore, there is no in-person appraisal, which means the company will approve your loan quickly. The company uses the eNotary to speed up the process. The funds are transferred into the account of the applicant within five days.

After the loan approval, the borrower can withdraw the 100% amount of the loan (after subtracting the origination fee). Also, the repayment starts immediately at the fixed rate you agreed to. When the borrower repays the credit line, he can make additional draws within a 2-to-5-year draw period. Repayment on the additional draws is fixed at the interest rate, which depends on the index. After the closer of the draw period, the repayment phases will start, lasting for five to thirty years. In that period, you cannot borrow and only focus on the repayment.

Figure HELOC Rates And Discounts

The interest rates of HELOC are indexed to the base rate, also known as the prime rate. The APR or annual percentage rate the borrowers are offered includes the margin the lender adds to the prime rate. The offered margin depends on the credit score, existing debt, and the amount you want to get, but they will change by the lender. The current prime rate is 8.50%, while last year's prime rate was 7.50% (minimum) and 8.50% (maximum).

The company does not post the sample rate on its website. So, you need to start the application to get the customized rate offers. The typical HELCO has variable rates, while Figure HELCO has a fixed rate. Therefore, it can be a solid choice for borrowers who want the value of predictable future payments. You can also be eligible for 0.25 percentage points for Quorum Federal Credit Union, Teachers Federal Credit Union, Valley Strong Credit Union, or autopay.

Features of Figure

Here are the features of the Figure:

• Painless Application Process: Everyone is busy and needs more time to visit the bank multiple times to finalize the loan application. Therefore, the painless and quick process of Figure suits everyone. Due to the automated system, the process removes the stress associated with applying for a new loan.
• Options For Borrowers With Low Credit Score: The company offers a better rate for higher credit scores. But, if you have a lower credit score, Figure offers you various options. And, if your credit score is as low as 620, you can secure your HELOC. So, the company lets you secure the funding without a sky-high rate.
• Competitive Rates And Terms: The rate the company offers you is competitive and attractive, especially if you have an excellent credit score. The company also offers the 30- and 15 year fixed terms for the refinances; borrowers can choose any of these when refinancing their schedule.
• Jumbo Loan Refinancing: The company provides two types of jumbo loan refinancing: cash-out and rate refinancing. With rate refinancing, borrowers can refinance up to $2,000,000 and enjoy better terms on the loan. You can refinance up to $1,000,000 with cash-out jumbo loan refinancing and $500,000 with a cash-out max. Remember that, to apply for these refinancing, you must have a credit score of 700 minimum.

Pros And Cons

Here are the pros and cons of Figure HELOC:

Pros Of Figure HELOC

1. Figure offers a completely secure online application process
2. Fast approval time while the funds are transferred within five business days
3. Both initial balance and additional draws have fixed interest rates
4. You can get the HELOCs for second homes
5. Closing can be available within five days only
6. Transparent procedure with no hidden charges
7. Your information is not shared with anyone
8. Cash-out refinancing
9. You can get APR discounts for paying the maximum origination fees
10. There is no appraisal, maintenance, or application charges

Cons Of Figure HELOC

1. Loan max out 400,000 USD
2. You need to pay an origination fee
3. An initial $20,000 withdrawal is required
4. A short draw period (two to five years)
5. Not available in all states
6. Not all the properties are eligible

Conclusion:

The FFigure has an online application process that offers the quickest turnaround time. The applicant can get approved within five minutes, and the loan is funded within a few days. But, it works like a loan instead of a traditional HELOC. Therefore, you have to withdraw the whole amount you have applied for, and you get access to the credit line as you pay the amount. Therefore, it is a great option for good credit borrowers who want a quick turnaround and are okay with withdrawing the whole amount at origination. The company also charges an origination fee of up to $4.99%.