Figure HELOC Review

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Our take on Figure’s HELOC

• Best overall HELOC
• 4.9 out of 5 stars
• You must draw 100% of funds at line of credit origination with ability to redraw as you pay off the balance
• Use of AI and block chain makes approval and funding fast

Figure shines as the best overall pick in our home equity line of credit (HELOC) comparisons. This high rating comes from its strong blend of low rates, fast approval, and several repayment term choices. Rates range from 6.10% to 14.74% APR, and a 0.25% rate discount is included in the rate for automatic payments.

Add to that the technological edge—Figure employs blockchain and artificial intelligence (AI) for rapid approvals and disbursement of funds. For borrowers with a strong credit profile seeking quick access to home equity without the traditional banking hassle, Figure stands out as a formidable option.

It’s worth noting that Figure requires you to draw 100% of your funds when your line of credit is originated. As you repay the balance, you’re able to redraw up to 100% during the draw period, which ranges from two to five years. Most lenders let you draw funds from your credit line as you need it, which can potentially reduce the amount of interest your pay.

In determining the best-for designation, we weighed multiple factors, such as customer reviews, interest rates, and repayment options. Figure scored high across these metrics. Therefore, if you’re after reliability, speed, and competitive rates, Figure’s HELOC deserves serious consideration.

About Figure

Established in 2018, Figure’s primary mission is to streamline home equity financing. Targeting homeowners interested in quick access to home equity funds, it uses blockchain technology and AI to expedite the traditional lending process. 

It portrays itself as a disruptor in the home equity space, so it’s essential to examine whether this technology-first approach aligns with your needs. The company is tailored to those comfortable with a digital-only process and who meet its eligibility requirements, such as a minimum credit score of 640. 

Figure’s offerings are not available in all states, and its loan terms may vary depending on several factors, including your state of residence and loan amount.

Figure HELOC at a glance

We’ll delve into each of these features in more detail later, but for now, here’s a quick overview of what Figure’s home equity line of credit (HELOC) offers:

Terms	Details
Rates (APR)	6.10% – 14.74% fixed
Rate discounts	0.25% for auto payment (included in your rate)
Loan amounts	$20,000 – $400,000
Draw period	100% of the loan amount (minus the origination fee) is drawn at the time of loan origination Additional draws can be made during the 2 – 5 year draw period
Repayment period	5, 10, 15, or 30 years
Repayment assistance	Forbearance and short-term repayment options
Fees	Origination fee up to 4.99% Possible manual notarization and recording fees
Unique features	Automation in approving loans, eNotary, blockchain, and AI technology

How does a Figure HELOC work?

The Figure HELOC process starts with an online application on the company’s website or mobile app. The process is streamlined thanks to innovative technologies including blockchain and an automated valuation model (AVM).

• Blockchain: Figure leverages blockchain technology to create an immutable record of your loan. Traditional methods required manual checking by administrators and trustees, a time-consuming and error-prone process. With blockchain, the data about your loan is securely recorded and shared, eliminating human errors and increasing efficiency.
• AVM: Figure skips the traditional in-person appraisal and instead uses AVM technology. This model estimates your home’s value by examining recent sales, public records, and historical trends, expediting the approval process.

After the property valuation, Figure quickly moves to approve your loan. Borrowing limits range from $20,000 to $400,000, and APRs vary from 6.10% to 14.74%. Figure includes a 0.25% rate discount for automatic payments, which are required.

• Quick funding: No in-person appraisal or closing means faster approval. Figure uses eNotary to hasten the process, although an in-person notary is also an option. Funds can land in your account in as little as five days.
• Initial draw: Once approved, 100% of your loan (minus your origination fee) is drawn, meaning you receive the cash for your full loan amount. 
• Repayment: Repayment begins immediately at the fixed rate you were approved for when you applied.
• Ability to redraw: As you repay the credit line, you can make additional draws from the line during the two- to-five year draw period. Repayment on these additional draws is set at an interest rate based on the index, which is the Prime Rate published in the Wall Street Journal for the calendar month preceding the date of the additional draw, plus a fixed margin.
• Repayment period: Once the draw period closes, the repayment phase kicks in, which can last between five and 30 years. During this period, borrowing ceases, and you focus on repayment.

Understanding Figure’s use of technology, along with the draw and repayment terms, gives you a complete picture of how its HELOC works and can help you make an informed financial decision.

Who’s eligible for a Figure HELOC?

To qualify for a Figure HELOC, you must meet certain criteria. If you’re applying jointly, you may include your spouse, but it’s not a requirement.

Requirement	Details
Eligible properties	Single-family residences, townhomes, planned urban developments, and most condos are eligible properties Ineligible properties include co-ops, commercially zoned real estate, and others mentioned in the outline Title changes within the last 90 days or properties in below-average condition are also ineligible
State of residence	Eligible in 44 U.S. states and Washington, D.C.  Excluded states are Kentucky, Delaware, Hawaii, New York, West Virginia, and Texas.
Maximum loan-to-value (LTV)	Up to 95% LTV—this is a combined LTV among all home loans
Maximum debt-to-income	Up to 50%
Minimum credit score	640
Minimum income	Not specified

What are the costs and fees of a Figure HELOC?

The fixed annual percentage rate (APR) on a Figure HELOC ranges from 6.10% to 14.74%, which affects your monthly payments and the overall cost of the loan. 

Rates are influenced by factors such as creditworthiness and property location.

Figure charges an origination fee that can vary between 0% and 4.99%, depending on your credit and property location. Figure rolls this fee into the loan payment schedule, so you don’t have to pay it out of pocket. 

Additional charges, including manual notarization and recording fees, may apply in specific situations. There are no opening fees, maintenance fees, or prepayment penalties.

Aspect	Description
APR	6.10% – 14.74% fixed
Origination fee	0% – 4.99%
Rate discounts	0.25% discount for auto-payment
Other fees	Manual notarization and recording fees may apply

How Figure calculates repayment

Read through the example below to see how to determine your overall cost.

• Suppose you borrow $100,000 with an APR of 7% and a 2% origination fee. 
• Over a 10-year repayment period, your monthly payments would be around $1,161. 
• The origination fee of $2,000 is rolled into your loan amount, raising it to $102,000. 

In this scenario, you’d pay approximately $39,330 in interest alone over the 10 years, making your total repayment around $139,330.

Cost component	Amount or rate	Calculation notes
Original loan amount	$100,000	The initial amount you decide to borrow
APR	7%	The annual interest rate on your loan
Origination fee	2% / $2,000	2% of the original loan amount
New loan amount	$102,000	$100,000 + $2,000 origination fee
Monthly payment	~$1,161	Over a 10-year repayment period
Total interest	~$39,330	Paid over the 10-year repayment period
Total repayment	~$139,330	Original loan + interest + origination fee

Compared to other lenders, Figure’s fees and rates are competitive. Its origination fee range is similar to industry standards, and the rate discounts for auto-payment can save you additional money. 

Make sure to consider these aspects carefully to determine whether a Figure HELOC aligns with your financial goals.

How do you repay a HELOC from Figure?

Unlike home equity loans, which require interest payments on the full loan amount from day one, when repaying for Figure HELOC, you’ll only be required to pay interest on the amount you withdraw. However, the more you repay on the line during the draw period, the more you have to redraw from the line before the end of your draw period. 

What occurs during the draw and repayment periods?

At the origination of your loan, you are required to draw the full amount of your loan, minus the origination fee, which is taken from your funds before you receive them.

Your draw period of two to five years then begins. As you repay the balance on the line, you’re able to take additional draws out of the line. The interest rate on the initial draw is set at the fixed rate you were approved for when you applied for the HELOC. The interest rate on additional draws is set at the Prime Rate at the time of the draw, plus a fixed margin.

You can redraw up to 100% of the original amount through the draw period.

Then the repayment period initiates—lasting anywhere from five to 30 years—and principal and interest payments become due, generally increasing monthly obligations.

What if I draw the entire approved amount?

Figure is the only HELOC provider we have found that requires you to draw the entire approved amount as origination. If you want the ability to redraw more funds during your draw period, you must begin repayment on the balance to free up those funds. 

Payment options and customization

You can manage payments online or over the phone. Figure requires automated payments from a linked bank account. Repayment terms include 5, 10, 15 and 30 years, which you choose when you apply for the loan.

Early repayment considerations

Figure imposes no penalties for early repayment, presenting an opportunity to save on interest costs.

How does your home’s value affect your terms?

The value of your home is crucial in determining how much you can initially borrow. Figure, like many HELOC providers, uses your home as collateral, which means the loan-to-value (LTV) ratio is determined by your property’s current market value and your mortgage balance.

LTV = Current mortgage loan balance / current appraised value of your home

When you apply for a HELOC, Figure adds the amount you want to borrow to your current loan balance to find your combined loan-to-value (CLTV) ratio.

CLTV = (HELOC amount + current mortgage loan balance) / appraised value

Figure will lend up to a 95% CLTV, but you need an excellent credit score and high income and assets to qualify for the higher range. Typically, Figure recommends that you have 30% or more in home equity and that your CLTV is lower than 80%.

For example, if your home value is $800,000 and your remaining mortgage balance is $450,000, you would qualify to borrow up to $190,000 based on borrowing 80% of your home value.

What does Figure’s appraisal process look like?

Determining your home’s current market value is an important part of the HELOC process. Figure uses an automated valuation model (AVM) to do this. Unlike traditional methods, no in-person evaluation is required, saving you time and effort. 

Instead, Figure’s AVM pulls from a variety of sources, including recent sales data, public records, and market trends, to assess your property value. This usually wraps up in a few days.

Generally, you’ll need to provide:

• Property type (single-family, condo, townhouse, etc.)
• Year built
• Square footage
• Number of bedrooms and bathrooms
• Any major renovations or upgrades

By using AVM, Figure streamlines the valuation process, getting you faster access to your home equity line of credit.

Comparing appraisal practices

Unlike traditional lenders that might demand a manual, in-person appraisal, Figure’s automated approach expedites the process and minimizes hassle. This makes Figure an appealing option for those who favor speed and convenience in their HELOC journey.

Pros and cons of Figure

Let’s explore the pros and cons of Figure’s HELOC to help you make a well-informed decision.

Pros

• Fast approval

  One of Figure’s major advantages is the speed at which it approves HELOC applications, circumventing the need for in-person appraisals and closings by leveraging eNotary.

• Quick disbursement

  Need the cash fast? Figure claims to disburse loans in as little as five days.

• High combined loan-to-value

  For homeowners looking to tap into a significant portion of their home equity, Figure offers up to 95% combined loan-to-value.

Cons

• Short draw period

  If you’re seeking a lengthy draw period, Figure might not be the best fit. Its draw periods last between two and five years.

• Full loan balance upfront

  Figure requires borrowers to draw the full loan balance at closing, which might not offer the flexibility some homeowners seek.

• Limited state availability

  Figure’s HELOC product isn’t available in every U.S. state.

Figure excels in the speed and efficiency of its HELOC process. However, it could improve by extending the draw period and allowing more flexibility in loan disbursements. 

For those residing in states where Figure doesn’t operate or those looking for more flexible draw terms, other home equity companies might provide more options. Hitch HELOCs, for example, have a 10-year draw period. Check out our resource on Figure HELOC alternatives for more.

Is Figure a reputable lender?

Before diving into any financial commitment, it’s crucial to gauge the lender’s reputation. Let’s take a look at what customers are saying about Figure.

Source	Customer rating	Number of reviews
Trustpilot	4.3/5	2,242
Better Business Bureau	1.57/5	53
Google	4.2/5	21

Data collected September 15, 2023

On Trustpilot, Figure has an impressive 4.3 out of five-star rating. Most customers applaud the lender for its easy application process and stellar customer service. Trustpilot is generally considered a reliable review source because it verifies its reviews to ensure they are genuine. Google reviews express a similar sentiment with a rating of 4.2 out of five.

On the other hand, Figure is not accredited by the Better Business Bureau (BBB), where it has a low 1.57-star rating. Complaints here often label Figure as “fraudulent” or a “scam.” 

Customers have also expressed dissatisfaction with unexpected changes in loan terms after preliminary approval. The BBB is a well-known platform where customers can file complaints, making its reviews noteworthy, even if a business is not accredited.

Figure’s reputation seems to be a mixed bag, but it’s worth noting the disparity in the number of reviews for these two platforms—it receives markedly more reviews on Trustpilot, with a higher rating, than the BBB. It scores well for ease of application and customer service but falters when it comes to reliability and consistency.

Does Figure have a customer service team?

Figure’s customer service team can assist you with a variety of needs—from answering questions about your application to handling issues with your loan. Contact options include:

• Email for general inquiries: [email protected] or [email protected]
• Email for active loan support: [email protected]
• Phone for general inquiries: 888-819-6388 (Hours: Monday – Saturday, 6 a.m. – 5 p.m. Pacific time)
• Phone for active loan support: 888-527-1950 (Hours: Monday – Friday, 6 a.m. – 6 p.m. Pacific time)
• Chat box: Available on Figure’s website
• Mailing address: 650 S. Tryon Street, 8th Floor, Charlotte, NC 28202

How to apply for a Figure HELOC

The application process for Figure’s HELOC is faster and simpler than many traditional lenders that require in-person meetings and heaps of paperwork. 

You can complete the entire application online, and Figure uses automation to expedite decisions, boasting a turnaround time of as little as five minutes for final approval.

Steps to apply

1. Visit the website: Navigate to Figure’s homepage and click “Find my rate.”
2. Enter personal information: Type in your name and date of birth.
3. Detail your property: Insert your property address and occupancy type.

4. Disclose income: Provide all necessary income information and your contact details.
5. Review rates: After a soft credit pull, Figure will present your rate options.
6. Submit more details: Choose to proceed and provide additional documentation, such as proof of identity and verification of income and financial accounts.
7. Final decision: Figure claims to make final decisions in as little as five minutes due to its use of automation.

What if I’m denied a HELOC from Figure?

Denial from Figure doesn’t mark the end of your journey in securing a home equity line of credit. Figure informs applicants about the reason for denial, aligning with the Fair Credit Reporting Act. This transparency allows you to take specific actions to address the issues.

Common reasons for denial and next steps

• Low credit score: Improve your credit by paying bills on time and reducing debt. Dispute any errors and inaccuracies on your credit report.
• High debt-to-income ratio: Lower this ratio by increasing income or decreasing debt. Rework your budget or consult a financial professional.
• Ineligible property: If your property type makes you ineligible, look for HELOC lenders with more flexible property criteria.
• Recent title changes: Wait out the required 90-day period after a title change before reapplying.

Applicants are free to reapply once they’ve addressed the cited issues. Remember, each lender has unique requirements, and a denial from Figure may not disqualify you elsewhere.

How do other home equity products compare to Figure?

In the landscape of home equity products, Figure’s HELOC has several distinctions. Let’s break down how Figure’s HELOC compares to other home equity options:

• Home equity loan
  • Similarity: Both use your home as collateral.
  • Difference: Figure offers a revolving line of credit; home equity loans provide a lump sum.
• Reverse mortgage
  • Similarity: Both are backed by your home’s equity.
  • Difference: Figure requires regular payments; reverse mortgages convert equity into income, ideal for retirees.
• Cash-out refinance
  • Similarity: Both allow you to tap into your home’s equity.
  • Difference: Figure has quicker approval but possibly higher rates; cash-out refinance replaces your entire mortgage, usually with lower interest rates, but has closing costs.

This snapshot should help you see where Figure’s HELOC stands in the broader context of home equity options.

Figure FAQ

How long does it take to receive funds from Figure?

Once you apply, Figure’s automated system can offer a loan decision in as little as five minutes. If approved, you can expect to see the funds in your account in as few as five days, thanks to an expedited process involving eNotary for online verification.

Do you need to tell Figure what the funds are used for?

Figure does not ask what the funds are for during the application process. Use of funds does not affect your eligibility. Funds could be used for home improvements, debt consolidation, emergency expenses, or something else.

Are there any insurance requirements?

Yes, Figure requires you to have homeowner’s insurance in place before approving your line of credit. The coverage must be sufficient to cover the value of your home as determined in the appraisal process. This is a standard requirement for most lenders offering home equity products.

Can you back out of a HELOC contract?

Yes, you can back out during various stages. During the application process, you aren’t obligated to accept the loan. If you’ve been approved but haven’t yet received the funds, you can still decline the offer. 

After receiving the funds, federal law allows for a three-day “right of rescission,” allowing you to cancel the loan without penalty.

Can you close your HELOC account at any time?

Closing a HELOC with Figure is possible, but check for any early closure fees. Generally, you’ll need to pay off the remaining balance and ensure all fees have been paid. Always review your contract for specifics related to early termination penalties.

How we rated Figure

We designed LendEDU’s editorial rating system to help consumers identify companies that offer the best financial products. Our experts spend hours researching these companies each year to ensure our ratings are fresh and accurate.

Our most recent evaluation compared Figure to several HELOC lenders across a number of factors, including rates, loan amounts, customer reviews, repayment details, and eligibility requirements. We weighted, scored, and combined these factors to produce a final editorial rating. This rating is expressed on a scale from 1 to 5, with 5 being the highest possible score. We round all ratings to the nearest tenth decimal place.

Product	Best for	Our rating
HELOC	Best overall	4.9 out of 5 stars	View rates