loanDepot Home Equity Review

3.1 _/5

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HELOC

• Lower interest rates than many credit cards
• No appraisal required
• Access a revolving line of credit
• Get a rate offer with no hard credit pull
• Funding in as little as 3 weeks

• Variable interest rates may increase payments
• Minimum payment is $100 or more during the interest-only repayment period
• Must draw a minimum of 75% of the credit line at funding or 100% if the line is less than $50,000
• An origination fee of up to 5% or more of the credit line amount, depending on state laws

Rates (APR)	Not disclosed
Funding amounts	$35,000 – $250,000
Repayment terms	30-year term: 20-year repayment period, 3-year draw period within the first 10 years’ interest-only period (except in Texas)
Min. credit score	520

Home Equity LoansView Rates

• Apply online in minutes
• Lower rates than many credit cards
• No appraisal required
• Get an offer with no hard credit pull
• Interest may be tax-deductible
• No prepayment penalty

• Not available in all states
• In-person notarization required

Rates (APR)	Not disclosed
Loan amounts	Up to $350,000
Repayment terms	20 years, with all payments going toward both interest and principal
Min. credit score	520

LoanDepot offers mortgage loans, home equity lines of credit (HELOCs), and home equity loans. The company streamlines the online application process, uses automated appraisal methods, and funds loans within three weeks to simplify and expedite the approval process. 

LoanDepot’s HELOC and home equity loans operate in a competitive market and don’t stand out in any one category. They may suit homeowners who value online convenience and traditional lending practices. However, the lack of detailed information on the company’s website about rates and eligibility criteria could be a limitation for those who want to compare loanDepot with other companies, such as Figure, Aven, and Bethpage Federal Credit Union.

Does loanDepot offer HELOCs?

LoanDepot offers HELOCs from $35,000 to $250,000 with a variable interest rate. With a HELOC, the homeowner takes out a revolving line of credit based on their home’s equity. Many people use HELOCs to pay for renovations, large purchases, unexpected expenses, or consolidate credit card debt at a lower interest rate than their credit cards.

HELOC repayment is based on a 30-year term. It includes two phases: a 20-year repayment period, where payments consist of full principal and interest, and a three-year draw period during the first 10 years’ interest-only period. Texas HELOCs have a three-year draw and interest-only period and a 27-year repayment period. 

Here’s a quick overview of loanDepot’s HELOC terms.

Terms	Details
Eligible properties	Primary and secondary properties
Eligible states	Not available in every state, but eligible states aren’t disclosed
Rates (APR)	Variable, capped at 18% but could vary based on state law limits (actual rates are not disclosed)
Loan amounts	$35,000 – $250,000
Draw period	3 years
Repayment period	20 years (varies by state)
Fees	Origination fee (up to 5% or state law limit)
Unique features	Online application, fast funding, in-person notary required

LoanDepot’s HELOC offers homeowners a flexible and adaptable way to access the equity in their homes. Here’s a closer look at how the process works, from application to accessing funds:

1. Online application process: Apply online with details about yourself and your property.  Have all relevant financial documents handy, such as proof of income, property details, and mortgage information.
2. Property valuation: LoanDepot typically uses automated valuation models (AVM)—software to assess your property’s value. The credit line amount depends on the equity (the difference between your home’s market value and any outstanding mortgage balance) in your home. 
3. Approval and credit line determination: LoanDepot evaluates your credit score, income, debt-to-income ratio, and other financial factors. LoanDepot determines the maximum amount you can borrow based on your home’s value and your creditworthiness.
4. Interest rates: The interest rates are variable, based on the Wall Street Journal prime rate plus a margin. This means your rate can fluctuate over time, influenced by market trends and economic factors. LoanDepot does not publish its rates.
5. Finalize the process: The application process is online, but finalizing your HELOC requires an in-person notarization to ensure all legal issues are addressed.
6. Access funds: Once the loan is finalized, you’ll enter the draw period, which lasts three years. During the draw period, you can borrow funds up to your credit limit as needed. You must draw at least 75% of the requested line amount (minus the origination fee) at the time of origination. You can access funds via ACH or wire transfer.
7. Interest-only repayment: During the three-year draw period and seven years after (in all states but Texas), you must make at least interest payments on the HELOC balance. In Texas, interest-only payments end when the draw period ends.
8. Full HELOC repayment: For most states, the remaining 20-year repayment period involves full principal and interest payments to repay your HELOC balance in full. In Texas, these full payments kick in after three years and last 27 years.

Who’s eligible for a loanDepot HELOC?

Eligibility for loanDepot’s HELOC depends on various factors, including property type and state of residence. However, the lender doesn’t specify many requirements, including income requirements, debt-to-income ratio, and loan-to-value ratio. You must apply or speak to a loan officer for eligibility requirements.

LoanDepot also does not disclose the eligible states to which it lends. You can check to see whether your property is eligible by checking your rate on the website or contacting the company at 866-790-3940.

Requirement	Details
Properties	Primary and secondary homes
State of residence	Not available in all states, but eligible states are not disclosed

What are loanDepot HELOC rates and fees?

Understanding the costs and fees associated with loanDepot’s HELOC is crucial for making an informed financial decision. Here’s a breakdown of these expenses.

Variable interest rates

The rates are tied to the Wall Street Journal prime rate plus a margin, meaning they can fluctuate over time. As the market conditions change, so will your monthly interest payments.

Origination fee

This fee is up to 5% of the line of credit or the maximum allowed by state law, whichever is less. This amount is taken from your funds upon your first draw. LoanDepot does not charge third-party fees.

How does your home’s value affect your terms?

The amount you can borrow through a HELOC depends on the equity you have in your home. The higher your home’s value, the more credit you may be eligible for, assuming other financial factors—such as income and credit score—meet loanDepot’s criteria.

LoanDepot doesn’t disclose its minimum loan-to-value ratio (LTV)—your current mortgage balance divided by your home’s appraised value—required to qualify for its HELOC. Many lenders allow a combined loan-to-value ratio (CLTV) of around 75% to 85%. The CLTV includes your primary mortgage plus the HELOC.

loanDepot’s appraisal process

To determine the value of your home for a HELOC, loanDepot primarily relies on AVM for appraisals. This method uses computer algorithms and market data to estimate your home’s value and aligns with modern lending practices.

The advantage of AVMs is their speed and efficiency. They can analyze various data points to provide an estimated value in a matter of days, which is beneficial if you’re looking to secure your HELOC quickly. This virtual method means there’s no need for physical inspections of your property, streamlining the process.

As an applicant, you might need to provide detailed information about your home, including its size, age, condition, and any improvements or renovations you’ve made. This information helps ensure the AVM provides a more accurate assessment of your home’s value. 

How do you repay a HELOC from loanDepot?

Repaying a HELOC from loanDepot involves several stages. It’s different from a home equity loan, where you get a lump sum upfront and make fixed monthly payments of principal and interest. When you first get your loanDepot HELOC, you enter the draw period, a three-year span where you can borrow as much as you need up to your credit limit. During this phase, you only pay interest on the amount you draw, not on the entire credit line.

Tip

Upon HELOC origination, you’re required to draw at least 75% of your credit limit. HELOCs less than $50,000 are required to draw 100% of the funds. After the closing date, you must wait 90 days before taking any additional draws.

After the draw period ends, you can continue making interest-only payments for seven years, meaning for 10 years of the 30-year repayment term, you’re only required to pay interest. You’ll pay principal and interest for the remaining 20 years of repayment.*

If your financial situation allows, you can pay off your HELOC early without a prepayment penalty. Managing a HELOC requires understanding its phases and how your actions during the draw period can affect your later payments. It’s a flexible financial tool, but it also demands careful planning and consideration, especially as you transition from paying interest only to handling full interest and principal payments.

*In Texas, interest-only payments end at the conclusion of the three-year draw period. You then enter full principal and interest payments for 27 years.

Does loanDepot offer home equity loans?

LoanDepot also offers home equity loans for up to $350,000 based on the borrower’s credit profile and loan-to-value ratio for their home. Home equity loans differ from HELOCs in that they are lump-sum loans, not revolving credit lines.

Who is eligible for a loanDepot home equity loan?

Homeowners may be eligible for a loanDepot home equity loan on a primary or secondary property. Borrowers need a credit score of at least 520 to be eligible for a home equity loan. The amount you may be eligible for and the interest rate depend on certain factors, including your  loan-to-value ratio and credit profile.

Apply online or by phone at 866-790-3940 to find out whether you’re eligible for a loanDepot home equity loan. 

What are the rates and fees of a loanDepot home equity loan?

LoanDepot doesn’t disclose its rates and fees on a loanDepot home equity loan. Borrowers must apply online or speak to a loanDepot loan officer to find out the interest rate they’re eligible for and any applicable fees.

How to repay a home equity loan from loanDepot

Repaying a loanDepot home equity loan differs from repaying a loanDepot HELOC in several ways.

Unlike the HELOC, a loanDepot home equity loan has no interest-only repayment period. The repayment term for a loanDepot home equity loan is 20 years. Each monthly payment goes toward the loan’s interest and principal during that period. 

You may be able to choose a shorter repayment term on a home equity loan, depending on your loan-to-value ratio and other financial factors determined by a loanDepot loan officer. No prepayment penalty applies for paying off your home equity loan early.

Pros and cons of loanDepot

Before pursuing a HELOC or home equity loan from loanDepot, it’s critical to consider the pros and cons of each product.

Pros

• Online application

  HELOC and home equity loan

• Streamlined process, but an in-person notary is required

  HELOC and home equity loan

• Fast funding in as little as three weeks

  HELOC and home equity loan

• No in-person appraisal process for most applications

  HELOC and home equity loan

• Uses automated valuation models, which can reduce complexity

  HELOC and home equity loan

• Fixed or variable rates

  Home equity loan only

• No prepayment penalty

  Home equity loan only

Cons

• Only variable interest rates

  HELOC

• Multiple draws on HELOC could lead to higher rates over time

• High initial draw requirement of at least 75% of credit line

  HELOC is not suitable for those not planning a substantial immediate draw

• Origination fee on HELOC

  Not disclosed for home equity loan

• Additional cost affecting the total loan expense

  HELOC, not disclosed for home equity loan

• Lack of eligibility information on the company website

  HELOC and home equity loan

• Uncertainty around minimum requirements

  HELOC and home equity loan

Alternatives to loanDepot

LoanDepot doesn’t publish specific rates for either product. The draw period for its HELOC is just three years—many other HELOC companies offer a 10-year draw period. The required draw makes loanDepot’s HELOC inappropriate for those seeking a HELOC to have on hand in case of emergencies.

LoanDepot earns a 3.1 rating from our team. Consider the following top-rated competitors, all of which offer more transparent terms.

Check out our resources on the best HELOC lenders and best home equity loans for more options as well as the full list of home equity companies we’ve reviewed.

loanDepot home equity loan and HELOC customer reviews

Customer feedback about loanDepot is largely positive, focusing on customer service quality and the transparency of loanDepot’s practices. While not specific to the HELOC product, these reviews offer insights into the company’s overall reputation.

Source	Customer rating	Number of reviews
Trustpilot	3.8/5	4,047
Better Business Bureau	4.18/5	3,562
Google	4.4/5	12,918

The Better Business Bureau, renowned for its focus on ethical business practices and complaint resolution, grants loanDepot an A+ accreditation, suggesting responsiveness and reliability.

The above reviews are not specific to the company’s HELOC and home equity loan products. They offer valuable insights into loanDepot’s overall practices, particularly regarding customer service and transparency. 

How do you manage your home equity loan or HELOC from loanDepot?

You can contact loanDepot’s customer service team in the following ways:

• Email: [email protected]  
• Phone: 888-337-6888 ext. 6789 (Monday through Friday, 10 a.m. – 9 p.m. Eastern)

Once you’re approved for a HELOC or home equity loan, you can make payments through the loanDepot online customer portal. Borrowers can also make payments via phone, mail, or in-person at a loanDepot branch.

How to apply for a loanDepot HELOC

Applying for a loanDepot HELOC or home equity loan is an all-online process, with the exception of an in-person notary at the final stages. You can also speak with a loanDepot officer on the phone to apply for both of these products.

Here are the steps involved:

• Prequalify: To check your rates without affecting your credit score, start with an online prequalification. This step involves providing basic information about your financial situation.
• Formal application: If you’re satisfied with the prequalification offer, proceed with the formal application. This step requires more detailed personal and financial information.
• Documentation: Gather and submit necessary documents, which may include proof of income, mortgage statements, property tax bills, and identification documents. The specific documents required can vary based on individual circumstances.
• Property appraisal: LoanDepot will conduct a property appraisal using AVMs to determine your home’s value and your available equity.
• Final review and approval: After reviewing your application and appraisal results, loanDepot will make a decision. This stage includes the credit check and final determination of line or loan terms.
• Closing: If approved, you’ll go through the closing process, which involves reviewing and signing various loan documents. This step requires meeting with an in-person notary.
• Access funds: Once the closing is complete, you can access the funds from your HELOC or get funds from your home equity loan based on the agreed terms.

The time each step takes can vary, but loanDepot is known for its quick process, with the possibility of receiving funds in as little as three weeks after application. 

How do other home equity products compare to loanDepot?

LoanDepot’s HELOC stands out for its flexibility, allowing homeowners to draw funds The variable rate means less predictability in payments and budgeting.

LoanDepot’s home equity loan stands out for its choice of fixed or variable rates, 20-year repayment term with no interest-only payments period, and no prepayment penalty.

Compare the loanDepot HELOC and home equity loan to other products detailed in the table below.

Product	Details	Consider this
HELOC	Revolving line of credit based on the loan-to-value ratio of your home and credit profile.	Variable rates may increase monthly payments; Flexible draws; 10-year interest-only period where payments don’t go toward principal
Home equity loan	Lump sum loan based on the loan-to-value ratio of your home and credit profile	Rates and repayment terms vary depending on loan-to-value ratio and credit profile
Reverse mortgage	Designed for homeowners over age 62; Converts equity into cash without monthly repayments or selling their home	Suitable for those seeking income without selling their home; lender adds interest each month, which increases the principal; sum must be repaid when you die or move from the home
Cash-out refinance	Replace your mortgage with a new one that gives you the difference in cash; no monthly payments	No credit line available; often have fixed rates; ideal for those looking to refinance at lower rates while accessing equity

Want to compare loanDepot to other lenders? Find additional home equity companies and the products they offer.

loanDepot FAQ

How long does it take to get funds from loanDepot?

The time it takes to receive funds from loanDepot can vary, but typically, the process takes between two to six weeks. This timeline includes application submission, approval, and the required verifications, which can depend on the complexity of your financial situation.

Are there any insurance requirements for a loanDepot home equity product?

Yes, like most lenders, loanDepot typically requires borrowers to have homeowners insurance as a condition for approving a home equity loan or line of credit. This is to protect the property that secures the loan. 

Is loanDepot a trustworthy company?

Yes, loanDepot is considered a trustworthy company. It is one of the largest non-bank mortgage lenders in the United States, with a solid reputation for offering a wide range of mortgage and home equity products. 

LloanDepot is accredited by the Better Business Bureau (BBB) and has a high rating, indicating a commitment to resolving customer complaints and maintaining a high standard of service. However, as with any financial institution, it’s important to review customer feedback and understand the terms of any loan agreement before proceeding.

How we rated loanDepot

We designed LendEDU’s editorial rating system to help readers find companies that offer the best home equity products. Our system awards higher ratings to companies with affordable solutions, positive customer reviews, and online transparency of benefits and terms.

We compared loanDepot to several home equity companies, using hundreds of data points from company websites, public disclosures, customer reviews, and direct communication with company representatives. We weighted, scored, and combined each factor to produce a final editorial rating. This rating is expressed on a scale from 1 to 5, with 5 being the highest possible score. Our take is represented in our rating, recapped below.

Product	Our rating
loanDepot HELOC and home equity loan	3.1/5