Hitch Home Equity Review
Read on for our Hitch home equity review. The takeaways? Quick access to funds and excellent customer service, but it’s only in three states.
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What we like:
Fast process. Application takes minutes, and funds can arrive within days.
|Rates (APR)||Starting at 8.25%|
|Loan amounts||Up to $500,000 (or 95% of your home equity)|
|Repayment terms||10 – 30 years|
|Minimum credit score||620 (but 640 or better is preferred)|
Founded in 2022, Hitch aims to solve one common problem: how to access capital tied up in a house through a home equity line of credit or loan. Its solution? Easy-to-use technology and an approval process that takes minutes instead of months.
Its mission is straightforward: help consumers save money on interest by accessing secured loans instead of credit cards, personal loans, or other high-interest unsecured options. Hitch works with different lending partners and offers home equity lines of credit (HELOCs) to Colorado, Florida, and Oregon residents.
Read our Hitch home equity review to determine whether a home equity line of credit from Hitch is the right financial product for you.
In this review:
- How does Hitch help me access my home equity?
- Pros and cons of a Hitch HELOC
- Do I qualify for a HELOC from Hitch?
- How do I apply with Hitch?
- How does Hitch determine how much I can borrow?
- What does the appraisal process look like?
- Does Hitch charge any fees?
- Does Hitch have a customer service team?
- Alternatives to Hitch
How does Hitch help me access my home equity?
You have two main options for accessing home equity—a home equity loan or HELOC—and Hitch offers HELOCs. Most people use these financial products to complete renovations, consolidate debt, or access money with lower interest rates.
A HELOC is like a credit card: You have a credit limit but aren’t required to access the money all at once. If your credit card has a limit of $15,000, but you only use it for a $500 purchase, that’s all you need to pay back.
|Hitch HELOC terms|
|Rates (APR)||7.75% – 13.00%|
|Rate discounts||Up to 0.25% depending on the lender|
|Loan amounts||Up to $500,000 or 95% of your home’s value|
|Draw period||Options include 2, 3, 4, 5 and 10 years|
|Repayment period||Options include 10 and 30 years|
|Maximum LTV||Specific to each applicant, but Hitch can lend up to 95% of the home’s appraised value|
|Minimum credit score||620 (640 or better preferred)|
|Minimum income||1 year of verifiable income|
|Fees||2.5% origination fee; $500 – $1,000 underwriting fee; up to $50 for a credit report; appraisal fee ($45 – $800 depending on type)|
Pros and cons of a Hitch HELOC
Your personal and financial needs will determine whether a Hitch HELOC suits your needs. Consider the following factors.
- Fast application process: From start to finish, the application takes just a few minutes. You don’t need to speak with someone on the phone or wait days for approval. The process is quick and painless, like applying for a credit card.
- Excellent customer service: The customer service team is available via phone and email. When you call, you’ll reach a Hitch team member who knows all about the products and can answer questions. You can also schedule a time to speak with a loan expert if that’s better for your schedule.
- Quick access to funds: The average HELOC application takes two to six weeks to finalize. Hitch helps HELOC customers access funds within days.
- Only available in 3 states: Hitch financial products are available in Colorado, Florida, and Oregon. It plans to expand, but as of February 2023, availability is limited.
- Must apply to view term options: Potential customers can only view repayment terms, interest rates, and other aspects of the loan online once they complete the prequalification process. The lack of information can make shopping around and comparing loan terms difficult.
- Requires a competitive credit score: With a minimum score of 620, the credit score requirements are more accessible than many lenders’. But for some borrowers, that score is out of reach.
- Works with lending partners: Instead of a HELOC directly with Hitch, the company matches borrowers with lending partners, who aren’t disclosed online.
If you’re unsure whether Hitch is right for your home equity needs, check out our list of home equity companies.
Do I qualify for a HELOC from Hitch?
In general, Hitch’s eligibility requirements for a HELOC are similar to that of other lenders: equity in the home, a solid credit score, and an eligible property.
Two items set Hitch apart from other lenders:
- No hard pull on your credit to prequalify
- Process only takes a few minutes
Borrowers can review loan options from Hitch without the negative impact of a hard inquiry on their credit report, which can lower credit scores.
We’ve researched eligibility factors for a Hitch HELOC.
|Requirements for Hitch|
|Eligible properties||Most single-family homes, including apartments, condominiums, and houses|
|State availability||Colorado, Florida, and Oregon|
|Prequalification process||Online application with no impact to credit score|
|Minimum credit score||620 (640 preferred)|
|Minimum income||1 year of verifiable income|
How do I apply with Hitch?
Here are the four steps to apply for a HELOC with Hitch.
Step 1: View loan options
To begin, enter your phone number, home address, and mortgage amount.
Then you’ll see loan options, including customizable loan amounts, terms, and APR. This step is also known as getting prequalified.
Estimated time to complete: 2 minutes
Step 2: Complete the application
Once you’ve selected the loan, you’ll complete the application.
During this step, you’ll input your personal information, including income, marital status, and citizenship.
Estimated time to complete: 15 – 20 minutes
Step 3: Upload required documents
It only takes a few minutes to upload the documents, but you need to gather all the required information first.
Among other documents, you’ll need a government-issued ID, proof of income, and proof of homeownership.
Estimated time to complete: 30 minutes
Step 4: Receive the funds
Hitch will work to finalize the process on your behalf once the application is complete. The finalization might include setting up a drive-by appraisal and other final steps, such as fee payment.
With Hitch, you can get the funds in a matter of days. Still, the timeline depends on your application and situation.
Estimated time to complete: Several days to several weeks
How does Hitch determine how much I can borrow?
With Hitch, you can borrow $500,000 or up to 95% of your home’s value. But that doesn’t mean you’ll get approved for the total amount.
The company considers the following to determine how much an applicant can borrow:
- Home price
- Credit score
- Loan-to-value ratio (LTV)
- Debt-to-income ratio
The loan underwriters—who assess an applicant’s finances and determine how much risk the lender can assume—consider all these factors when they make a lending decision.
What is loan-to-value ratio?
LTV is how lenders assess lending risk based on how much equity a borrower has in their home. It’s calculated based on the amount you owe on your mortgage and your home’s appraisal. To learn your LTV, divide the amount owed by the current value.
For example, if you still owe $100,000 on your home and it appraises for $200,000, your LTV is 50% ($100,000 / $200,000 = 0.50).
Hitch considers LTV in lending decisions but doesn’t state a maximum or minimum. Hitch says it can lend up to 95% of your home’s appraised value, or $500,000.
What does the appraisal process look like?
During the preapproval process, Hitch uses an automated valuation model to estimate the value of a house.
Before finalizing the loan, the lender must complete the appraisal. You might have one of three appraisal types based on the lender’s requirements. The decision is often based on the home market, not specific factors related to the applicant.
The appraisal amount determines the maximum you can borrow, an essential part of the process.
The three types of appraisals from Hitch lenders are:
- Automatic appraisal ($45 fee): An automated appraisal uses artificial intelligence to gather data about home prices in the surrounding area to determine the value of a borrower’s home. The fee is lower for this one because it doesn’t require work from a human.
- Drive-by appraisal ($150 fee): The lender gathers data about home values in the neighborhood with this appraisal, and then an appraiser drives by the property to view the outside of the home and others nearby. The appraiser doesn’t go inside or examine the exterior.
- Full appraisal ($800 fee): A full appraisal involves data collection about home sales in the neighborhood, but most data collection occurs at the home. The appraiser visits to examine the home’s condition, inside and out. Hitch lenders do not often require a full appraisal. Borrowers might request it if they disagree with the home value from a different appraisal type.
Does Hitch charge any fees?
Like most HELOC lenders, Hitch charges fees. Costs to prepare for with a Hitch HELOC include the following:
|Type of fee||Fee amount|
|Origination fee||2.5% of loan amount|
|Underwriting fee||$500 – $1,000|
|Credit report||Up to $50|
|Home appraisal||$45 – $800, depending on the type|
|Title search fee||None|
Does Hitch have a customer service team?
As a small company, Hitch offers excellent customer service. You won’t need to chat with a robot or wade through automated phone menus. Instead, you’ll connect with a live representative via phone or email. Plus, you can schedule a time for a loan expert to call you.
Loans are a significant financial commitment, so you need to feel confident in your knowledge of the process.
- Phone: Call the Hitch team at 1-833-512-0284. Representatives can answer questions Monday through Friday from 9 a.m. to 5 p.m. Mountain time.
- Email: The Hitch team is available via email at [email protected]. You’ll get a quick reply from a knowledgeable human.
- Schedule a call: If you have questions about the application process or loan terms, schedule a call with a Hitch loan expert. After you start the prequalification application, Hitch will email you a link to its scheduling calendar.
Alternatives to Hitch
A HELOC or home equity loan is a significant decision that can affect your finances for years and even decades. It’s wise to shop around for the best HELOC lenders.
Make a list of your priorities for a loan, and consider the following questions:
- How soon do you want access to the funds?
- Are you searching for specific repayment terms?
- How important is the interest rate?
Your list of priorities is unique and will help you determine which lender fits best.
Author: Taylor Milam-Samuel