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Figure Home Equity Line of Credit Review
By Jackie Lam MONEY RESEARCH COLLECTIVE
Figure is an online lender that provides home equity lines of credit (HELOCs) to homeowners. Figure offers HELOCS and other financial services and personal finance products to those in need of extra cash.
Read on to learn about Figure, the types of HELOCs it offers and how it stacks up in the home lending industry. Remember, though, that while the interest rates and loan terms listed here were correct when this article was written, they change all the time.
Table of Contents
Figure’s Services
Figure’s Credentials
Figure’s Accessibility
Figure’s Customer Satisfaction
Figure HELOC Review
- Home equity rates start at 4.24% APR
- Application as quick as 5 minutes
- Funding in as little as 5 business days
- Savings up to 0.75%
- Aggregate loan limits of up to $400,000
- Not a wide selection of home loan options
- Not all types of properties are eligible
- Must make an initial draw of 100% of your credit limit
Figure’s Services
Headquartered in Charlotte, North Carolina, Figure is a financial institution that offers HELOCs of up to $400,000. Boasting an entirely digital application, speedy funding times and lower-than-average interest rates, Figure serves homeowners who want to make the most of their home value and tap into their home equity.
Since its launch in 2018, Figure has offered over $5 billion in funding to over 60,000 of its customers. Beyond home equity lines of credit, Figure also helps startups and private companies raise capital and manage equity.
What they offer
HELOCs. One of Figure’s three main products is its HELOC, which can be used for a number of purposes, from making home improvements to starting a business to paying back student debt. While other home equity lenders offer higher loan limits, Figure’s HELOCs start at $15,000 and cap at $400,000. If a borrower takes out several loans on different properties, the maximum amount they can receive in funding is $400,000. Loan terms run from 5 to 30 years. Borrowers with higher credit scores and more equity in their house will qualify for the larger loan amounts.
Unlike other HELOCs, which allow homeowners to draw on their line of credit in portions commensurate with their immediate needs, Figure’s HELOCs require borrowers to receive the entire funding amount at the initial draw. As you make payments on the balance, you can make additional draws during the draw period, but the interest rate on those draws may be different.
Funding in as little as five business days. The application process, including the appraisal, is done entirely online and can take only a few minutes. Once approved, the funds are deposited into a borrower’s account within five days.
This is far quicker than the time frame offered by most banks and finance companies, which can take up to a month to fund a loan. However, this faster-than-average disbursement requires homeowners to use Figure’s remote online notary to close their loans. If you live in a county that requires you to close in person, or if the condition of the property can’t be immediately verified, you should expect longer funding turnarounds.
Low interest rates. While APRs for HELOCs are advertised as starting at 4.24%, they can run as high as 11.5%. A borrower can qualify for interest rates on the lower end if they have strong credit, if their property is located in certain states, and if they opt for certain five-year loan terms. Longer loan terms typically involve higher interest rates.
Customers may receive up to a 0.75% combined discount on their HELOC. Borrowers can snag a 0.25% discount if they sign up for autopay and 0.50% if they take out a membership with one of Figure’s credit union partners.
Depending on what state they live in, borrowers may also be able to finance their closing costs. Currently, Figure’s closing costs are up to 4.99% of the loan amount.
Cryptocurrency as collateral for a home mortgage. While this product hasn’t quite launched, Figure is currently signing up interested people on a waitlist. Homeowners will be able to tap into their Bitcoin or Ethereum to use as collateral for a line of credit up to $3 million.
Best for Parent Borrowers: SoFi
What they don’t offer
Jumbo HELOCs. While some of Figure’s competitors offer HELOCs with credit limits up to $1 million, Figure’s home equity loans cap out at $400,000. Borrowers looking for higher limits will have to look elsewhere.
HELOCs for all types of properties. The property must be the homeowner’s primary or secondary residence. Properties purchased in the last 90 days aren’t eligible.
The following types of properties are eligible for a Figure HELOC: single-family residences, townhouses, and most condos.
Here’s what’s not eligible: co-ops, commercially zoned real estate, multifamily properties, mixed-use properties, and unconventional properties such as manufactured homes, dome homes, timeshares, log homes and houseboats.
Fixed to variable rate HELOCs. While some HELOC lenders offer the option to switch from a fixed to a variable rate, Figure’s HELOCs are strictly fixed-rate loans.
Mortgages. While Figure has partnered with Homebridge to offer mortgages, as of March 1, 2022, it has paused accepting new applications for home loans and refinancing.
Figure’s Credentials
HELOCs are tightly regulated at the state, federal, and industry levels. At the federal level, the Truth in Lending Act (TILA), governs what types of loans can be sold and details consumer rights. The mortgage and home equity loan industry is also regulated at the state level.
Licenses and registrations
Figure is currently licensed to issue mortgages and other home equity products in 41 states and the District of Columbia. Note that the company is not currently licensed in New York.
Awards and certifications
Figure doesn’t have any major industry awards or certifications under its belt in connection with its home equity loans.
Third-party ratings
The company has no third-party ratings from industry publications.
Regulatory or legal actions
No regulatory or legal actions have been taken against Figure.
In December 2020, the Conference of State Bank Supervisors (CSBS) filed a lawsuit not directly against Figure, but against the Office of the Comptroller of the Currency (OCC). It had to do with Figure trying to gain a national bank charter without first obtaining deposit insurance from the Federal Deposit Insurance Corp. (FDIC).
In response, Figure updated its charter application to include that it intended to seek FDIC deposit insurance. Once that change was made, CSBS dropped the lawsuit.
Figure’s Accessibility
Figure’s home equity loans are available in 41 states plus the District of Columbia. Figure’s services are primarily available online, but potential customers and current borrowers may also reach the company’s customer support team via phone and email.
Availability
Current borrowers can reach Figure’s customer support Monday through Friday, 6 am to 6 pm PST, excluding bank holidays.
Potential borrowers who would like help with Figure’s home equity, personal loan, or mortgage refinancing services can get assistance Monday through Sunday, 6 am to 6 pm PST, excluding bank holidays.
Contact information
Figure has different phone numbers that connect to dedicated customer service teams for different products and types of inquiries.
User experience
By applying online and using an e-notary, current borrowers can enjoy an entirely digital experience. Ironically, Figure doesn’t have an app that would allow its HELOC customers to make monthly payments and check loan balances from their phones.
Limitations
While Figure’s customer support for HELOC applications is available seven days a week, there’s no chat function for assistance with an existing loan. And unlike many lenders, Figure doesn’t offer an app.
Figure’s Customer Satisfaction
Figure has been the target of a number of customer complaints in the last few years. However, consumer comments about lenders skew negative across the board, so they should be read in that context. Few people are motivated to leave a comment about a product or service that delivered what was promised in a timely fashion.
Customer complaints
Figure has an A- rating from the BBB and no customer complaints, but the company rates only 2 out of 5 stars. Consumer reviews on the BBB website are largely unfavorable and are mainly about snags in the application process and unprofessional customer service teams that are often hard to reach.
Figure boasts a rating of 4.6 stars on Trustpilot, which puts it in the “excellent” category. Of the over 1,900 reviews, only 6% are in the “bad” category.
In the last three years, there have been 20 complaints filed about Figure with the Consumer Finance Protection Bureau.
Third-party ratings
There are no third-party ratings for Figure except the BBB and Trustpilot scores that are mentioned above.
Figure HELOC FAQs
Does Figure require an appraisal for a HELOC?
Figure does require an appraisal for a HELOC. However, you don't need to have an appraiser do an in-person walk-through of the borrower's home. Figure assesses what the property is worth during the application process by using an Automated Valuation Model (AVM).
To gauge the property's worth, the AVM factors in metrics such as public data records, similar properties and historical price trends in the housing market. The process is done entirely online.
How long does it take to get money from Figure?
One of Figure's standout features is that it can take only five business days after a homeowner's application is approved to receive funding. This depends on whether a borrower is able to use the e-notary and whether there are any red flags on the condition of the home.
What is the interest rate for Figure?
At present, the interest rate for Figure is between 4.24% and 11.50%. To qualify for a lower APR, borrowers need an excellent credit score and a shorter home loan term. One's debt-to-income ratio may also be factored in. Interest rates change fairly often, however, so it's a good idea to check Figure's website for the most up-to-date information.
To determine your rates and loan amount, Figure will do a soft pull of your credit. Only when you actually apply for a HELOC will Figure perform a hard pull.
Is Figure available in all states?
Figure HELOCs are currently available in 41 states and Washington, D.C.
How We Evaluated Figure Home Equity
To determine the value of Figure as a home equity lending company, we looked at the products and services it offers and compared it to other leading companies in the home lending space. We also paid attention to rates, terms, customer service, complaints and the ease of use of the company’s website.
Summary of Figure Review
Figure offers a fully digital path to applying for and a home equity line of credit. The company could be a strong contender for homeowners who are comfortable with an online-only lender and are looking for quick funding and don’t need a HELOC above $400,000.
However, borrowers who want to speak to a human or want higher loan limits might prefer to work with a different lender. Review our best home equity loans article to see which one might be a good fit for you.
