How soon after buying a home can you apply for a HELOC?

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texas lawdog
Posts: 205
Joined: Tue Jun 07, 2016 5:33 pm

How soon after buying a home can you apply for a HELOC?

Post by texas lawdog »

I'm currently in the process of buying our forever home with cash and would like to have a HELOC available.
If your new house closes on say Jun 1, could you turn around and apply for the HELOC on Jun 2, or is there some minimum amount of time that you must wait for all the paperwork to settle on the new home?

Thanks
seawolf21
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Joined: Tue Aug 05, 2014 7:33 am

Re: How soon after buying a home can you apply for a HELOC?

Post by seawolf21 »

Guessing you can apply but HELOC lender title agent would like to see the deed and first mortgage (if any) recorded before it can go to closing.
123
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Joined: Fri Oct 12, 2012 3:55 pm

Re: How soon after buying a home can you apply for a HELOC?

Post by 123 »

If a cash offer was necessary to get a home purchase offer accepted you may want to explore a regular home equity loan (basically a cash-out refinance) instead of a HELOC. A home equity loan would generally have a lower interest rate. The home equity loan would guarantee your loan amount and payment whereas the HELOC terms can change over time, primarily the interest rate. It would depend on whether the interest in the HELOC is as a contingency or for a known expected need.
The closest helping hand is at the end of your own arm.
happyjuice8000
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Joined: Sun Mar 31, 2013 1:52 pm

Re: How soon after buying a home can you apply for a HELOC?

Post by happyjuice8000 »

I got a HELOC 3 days after closing on the house with TD Bank. No issues at all. The HELOC gives the option to convert part or all of the HELOC to a fixed rate home equity loan.
exodusNH
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Re: How soon after buying a home can you apply for a HELOC?

Post by exodusNH »

texas lawdog wrote: Tue May 24, 2022 11:01 pm I'm currently in the process of buying our forever home with cash and would like to have a HELOC available.
If your new house closes on say Jun 1, could you turn around and apply for the HELOC on Jun 2, or is there some minimum amount of time that you must wait for all the paperwork to settle on the new home?

Thanks
Does your state have any sort of "regret" period? E.g., when I refied my house in January, there was 3 day period where I could cancel it.

Other than that, the HELOC provider might want to see the deed updated by your county, which can take a variable amount of time. You'd have to ask your prospective lender.
greenflamingo
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Joined: Sat Jan 26, 2019 4:29 pm

Re: How soon after buying a home can you apply for a HELOC?

Post by greenflamingo »

My mortgage lender had an offer to open an HELOC at closing. I'll sign the papers when I close and funds will be available within 3 days.
DoubleComma
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Re: How soon after buying a home can you apply for a HELOC?

Post by DoubleComma »

I don’t believe there is a requirement to own the home for a specific period of time before being eligible for a HELOC…but ownership <1 year means they will only use the initial appraised value or less if a new appraisal comes in lower.

After a year, assuming you have market appreciation or you paid down the balance, you can apply using the current value of the home to establish LTV. This matters if your initial loan is a traditional 80 LTV, it would be hard to get a HELOC that reduces the LTV less than 80%.
Topic Author
texas lawdog
Posts: 205
Joined: Tue Jun 07, 2016 5:33 pm

Re: How soon after buying a home can you apply for a HELOC?

Post by texas lawdog »

Thanks all for the replies. This will be an all-cash purchase without any mortgage lender involved.
It feels good to buy a home free and clear, but I'm a little nervous about having that much tied up in equity.
To be on the safe side, I'll wait a couple of weeks for the deed to get recorded and then apply.
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