Figure: 2022 Home Equity Review

Founded in 2018, Figure is a new lender that provides home equity lines of credit (HELOCs) in 41 states and Washington, D.C. Headquartered in San Francisco, Figure uses blockchain technology and artificial intelligence for an entirely digital application and funding process.

Borrowers can receive up to $400,000 through a Figure HELOC in as little as five days. Here’s what you need to learn about the lender and its product to determine if it’s the right fit for you.

Figure snapshot

Loan types offered	HELOC
APR range	Starting at 4.49% APR (with autopay and Credit Union Membership)
Loan amount range	$20,000 to $400,000
Minimum credit score required	640
Repayment terms	5 to 30 years
Average time to approval	5 minutes

Figure is best for home improvement, debt consolidation and online loans

Figure won a large number of Bankrate awards for 2022: best for borrowers with fair credit, best for home improvement, best for debt consolidation, best online lender and best innovative home equity product.

Figure’s low minimum credit score requirement and low starting APR combined with its innovative online options make it an ideal lender for many people.

Benefits

There’s a lot to like about Figure; here are some things to know before you apply:

• Fast funding time: You can get approved for a HELOC with Figure in as little as five minutes and get your money in as little as five days.
• Competitive interest rates: As of July 18, 2022, the average HELOC rate is 8.54 percent. With Figure, APRs start at 4.49 percent. You must enroll in automatic payments and opt into a Credit Union Membership to receive the discount that factors into the lowest APR. What’s more, your rate is fixed each time you make a draw.
• Minimal fees: Figure charges an origination fee of up to 4.99 percent of your initial draw. However, there are no appraisal fees, annual fees, late fees or prepayment penalties.

Drawbacks

Figure’s home equity products do come with a few drawbacks, including:

• Not all properties are eligible: You can’t qualify for a HELOC on co-ops, commercially zoned real estate, multifamily (2+) real estate, manufactured housing, earth or dome homes, timeshares, log homes, houseboats or mixed-use properties.
• Minimum draw requirement: When you receive your Figure HELOC, you must draw the entire loan amount, and you can make additional draws as you pay off the initial amount. In contrast, most other HELOCs allow you to only draw what you need, when you need it, potentially reducing interest costs.
• Relatively lower loan cap: HELOCs from many popular lenders have loan amounts that stretch to $500,000 and higher. Figure, on the other hand, has a $400,000 cap.

Types of fees charged

Figure charges an origination fee, which can range from 3 percent to 4.99 percent of your initial draw amount, depending on your location. You may also be responsible for recording fees. However, you don’t need to worry about appraisal fees, annual fees, late fees or a prepayment penalty.

If you’re looking for ways to lower your monthly payment, you can sign up for autopay for a 0.25 percent discount and opt into a Credit Union Membership for an additional 0.25 percent discount.

Loan products offered

Borrowers can get a fixed-rate HELOC between $20,000 and $400,000 with repayment terms of five, 10, 15 and 30 years. The lender uses an automated valuation to appraise your home, so there’s no fee involved.

Once approved, you’ll receive the initial draw amount in as little as five days. As you repay the initial draw amount, you can make additional draws from $500 up to 100 percent of the initial draw amount plus the origination fee. Unlike most conventional HELOCs, Figure uses a fixed-rate model — meaning each draw receives a fixed interest rate based on the prime rate at the time of the draw. Because of this, different draws will receive different rates, but the rate you lock in with each draw will not change over the repayment period.

You can make additional draws for two to five years after the HELOC originated, depending on the length of your repayment term.

How to qualify for a home equity loan with Figure

You need a credit score of at least 640 to get approved for a Figure HELOC. However, borrowers with higher credit scores have access to larger loan amounts.

For primary, owner-occupied properties on the first or second lien, the CLTV (combined loan-to-value ratio) caps range depending on the borrower’s FICO score:

• 640-659 credit score: up to 75% of home equity
• 660-699 credit score: up to 85% of home equity
• 700-850 credit score: up to 90% of home equity

For third liens, the CLTV cap is 70% for FICO credit scores of 640-850.

For secondary or properties occupied by the owner less than six months out of the year, all liens have a cap of 70%, and the borrower’s credit score must be at least 680 to qualify.

If you’re unsure if you qualify, Figure offers a prequalification option, where you can see if you are eligible for a HELOC without impacting your credit score.

How to get started

Figure has an all-digital HELOC, which includes an online application, e-notary and e-signatures. To start the application process, head to the Figure website and click on “Find my rate.”

From there, you’ll provide basic information, including your address, property type, name, date of birth, income, email address and reason for borrowing. Once you submit the information, Figure will run a soft credit check and show you a rate offer.

From there, you can officially apply, at which point the lender will make a hard inquiry on your credit report. During the process, you’ll need to connect at least one checking account to allow the lender to verify your income and set up the loan disbursement. You’ll also need to provide a government-issued ID, such as a driver’s license, state ID or U.S. passport.

If your loan is approved, you’ll do a video session with an e-notary, who will verify your identity, allow you to review and sign the loan document electronically and notarize your loan. However, some counties may require you to work with a notary in person.

If you have a question during the process, you can contact Figure’s customer service team via email at loans@figure.com, phone at 888-819-6388 or live chat on the website.

If you choose to call, representatives are available Monday through Sunday from 6 a.m. to 6 p.m. PT, except on major national holidays.

How Bankrate rates Figure

Methodology

To create our Bankrate Scores, we evaluated lenders based on availability, affordability and customer 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. Customer experience was assessed based on online application and account availability, customer support, auto payment availability and mobile app availability and ratings.