Citizens Bank: 2023 Home Equity Review

Methodology

To create our Bankrate Scores, we evaluated lenders based on availability, affordability and borrower experience. Availability was assessed based on the minimum loan amount required, time to approval, days to close, minimum draw requirements, minimum credit score requirements and loan types offered. Affordability was assessed based on minimum APR, discounts and promotions offered and associated fees. Borrower experience was assessed based on online application and account availability, customer support, auto payment availability and mobile app availability and ratings.

Benefits

• There are no closing costs or application fees for a HELOC from Citizens Bank, and you won’t pay an annual fee (normally $50) for the first year. The GoalBuilder HELOC doesn’t impose this fee, nor a prepayment penalty.
• During the 10-year draw period, you can choose to make interest-only payments or payments that include principal and interest.

Drawbacks

• You’ll only be able to apply for a HELOC with Citizens Bank if you’re a borrower in Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, Virginia or Washington, D.C.
• The bank charges an annual HELOC fee of $50 after your first year.

Types of fees charged

While Citizens Bank doesn’t charge an application fee or closing costs on HELOCs, it does charge late fees, as well as a $50 annual fee after the first year. Its GoalBuilder HELOC doesn’t come with the annual fee or a prepayment penalty.

Home equity loan products offered

Citizens Bank offers a standard HELOC and the GoalBuilder HELOC. Both have variable interest rates.

Among the benefits of the standard HELOC, you can get a 0.25 discount off your rate if you sign up for automatic payments from a Citizens checking account (or auto-withdrawal from any checking account, depending on where you live). The line of credit has a 10-year draw period and a 15-year repayment term. While you can pay both principal and interest during the draw period, you only have to make payments on interest at that time. You’ll need to take out a line for a minimum of $17,500.

The bank’s GoalBuilder HELOC, in contrast, allows you to take out as little as $5,000 and up to $25,000. It has no annual fee or prepayment penalty, but is only available in some states.

How to qualify for a HELOC with Citizens Bank

Citizens Bank looks at three main factors when determining eligibility for a HELOC: your credit history (FICO score); your loan-to-value (LTV) ratio; and your debt-to-income (DTI) ratio. The bank doesn’t disclose credit score requirements, but to get the best HELOC rates, you’ll need an LTV ratio of 80 percent or less.

How to get started

During the online application process, you’ll need employment details and the date of birth and Social Security number for you and your co-applicant, if you have one, along with two of your most recent pay stubs. Additionally, you’ll need information on the property, including its current value, the year it was built, the purchase date and price, your current mortgage payment and details on any existing liens. You’ll also need your homeowner’s insurance and property tax information.

You can apply for a HELOC on Citizens Bank’s website or by calling 888-333-1206, 8 a.m. to 8 p.m. Monday through Friday. Once you’ve submitted a HELOC application, a loan officer will respond to you within one business day. From there, they’ll provide next steps for your application.