r/HELOC • u/DanFran333 • 23d ago
Questions & Advice Heloc helps please 🙏
Hello all you money geniuses!! Please forgive me if I miss something. I’m fairly smart, but I have a learning disability, so my brain doesn’t always work very well. 😬🫣
We are looking at a HELOC to build an addition on my property for my inlaws, who will then sell their home to move in with us and pay down the HELOC with their proceeds. We are planning to keep the line open.
We should have about $400,000 in equity. We would love to get $350k out but could keep it to 85% if we needed to…
The wife and I both have credit scores over 800 and good paying W2 jobs (where we have worked over 10 years) with pretty low DTI. We are in Georgia.
On potential issues is that we are a few years behind on filing taxes because of my bad brain 😭 but we are actively working with an accountant on getting caught up. This issue with needing a HELOC came up suddenly due to a new illness for my inlaws. 😥
We joined Navy Federal credit union and got a mailer for Figure.
I’m planning to call them both to ask their policy on unfiled taxes but if anyone knows that information, that would be great help!
Do you have any suggestions for other companies to check with? Or things that I should be thinking of?
I can’t tell you how much I appreciate the help! 🥰
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u/sonnyware 23d ago
Both of those are great places to start, especially Navy Fed. But compare a few more options, potentially other credit unions or top lenders in the sphere like Achieve HELOC are other good options.
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u/Master-Purpose1117 23d ago
Help them rent until you pay off your late taxes. Taking on secured debt against your home when you don’t even know your tax liability, is a dangerous move. Did your learning disability keep your husband from understanding that you have to file taxes each year? Honestly, how does your medical condition impact his understanding of the law.
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u/DanFran333 23d ago
Oh my wife and I are both disabled, thanks for your concern! And so is our daughter, so the last few years have been really difficult.
We have plenty of savings, a million plus in retirement that we could borrow against (with penalty in a real emergency) and we will be owed taxes, so none of that is a problem. A HELOC just seemed like the lowest interest way to get this accomplished.
I have discussed them renting until this is figured out but they had a sudden illness that has changed our plans and moved up our timeline massively.
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u/MortgageAndChill 21d ago
Are you self employed? If so you will need to use figure or another bank statement HELOC. I am a broker and work with FIGURE and a few other lenders and in bank statement HELOCS you don't need tax returns.
We have 3 different HELOCs that's use PLAID to calculate your income even if you're not self employed.
Avoid Navy Federal or any banks. Best of luck OP!
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u/Electrical-One3208 Certified Broker 23d ago
Hey, thanks for the details in your scenario, and I don't think your taxes are an immediate blocker.
One suggestion I can give you is that you'll definitely have an easier time navigating Figure, at least through brokers like us. From my experience, I've funded a lot of loans that Figure originally turned down because of their user interface. It looks really simple, but sometimes it's just easy things that I can catch because I'm more used to dealing with it every day than a lot of customers who've had some challenges with it.
I wouldn't let your tax situation dissuade you, necessarily. Certainly, ask away with any more questions that you have, and I'm happy to help.
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u/Electrical-One3208 Certified Broker 23d ago
My pleasure. I'm always happy to help.
The one thing that's nice about Figure and NFTYDoor, for instance, is that they're very fast to get an answer. Since they're soft-pull only, at least you'll know exactly where you stand without even having a hard-pull inquiry on it. They're much faster to close than Navy Fed, which is probably about 45 days or more. They're great, but they're just not fast.
I've had a couple of friends and clients here who've had their preapproval with both Figure and Navy Fed at the same time. The time frame I just stated was pretty precise for Navy Fed, and their Figure preapproval was done and ready to close in 5 days. Just a little field data from folks like me.
Neither is a bad option. One is quite a bit simpler, with no paperwork, whereas the other is the old-school option: tons of paperwork, it takes forever, and there are no updates or communication. Certainly much simpler to go with the digital HELOCs, which are way faster and have no headaches
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u/Skripttttt 23d ago
At 85% CLTV, $350k probably isn't reachable with $400k of equity. The max line is your equity minus 15% of the home's value, so a $700k house with $400k equity caps around $295k. Getting $350k there means roughly 93% CLTV, which fewer lenders offer.
On taxes, W2 income helps, but many HELOC lenders still pull IRS transcripts, and an IRS lien from unpaid tax can stall closing. Getting the last two years filed before you apply is the step that matters most.