Home Equity Loan How Long After Purchase (And Why)?

Exact Answer: 30-45 Days

A home equity loan is a kind of loan that most people prefer to borrow so that to use their home’s equity as collateral. It is then the loan amount that is determined by looking or screening the value of the property that is done by an appraiser from a lending company or an institution.

The loan is a fixed amount of money which is a secured amount that you have on the value of your home. You need to repay the loan amount with monthly payments made equally on a fixed term similar to a mortgage. On the other hand, if you fail or unable to repay the loan amount as agreed, your lender can take possession of your home.

Home Equity Loan How Long After Purchase

How Long After Purchase Is Home Equity Loan?

Action against payment defaulterThe lender who has lent you the loan can take or foreclose on your home.
How does a home equity loan work?You need to pay the loan by making partial payments to your lender.

You should also know that there is no strict period for a home equity line of credit. In case if you have got enough equity at the time of closing your home purchase then there is a chance that you can get a HELOC in just a month and a half time. This is the time taken for underwriting the loan and then process the application.

But, the main question here arises is that how much equity do you need? Well, before considering looking at HELOC, you must have 20% of the equity of your home. In case you have bought your home through a certain program that had required minimum down payments like a Federal Housing Administration loan, then the loan payment could go as below as 3.5%.

Equity Loan

There could be many advantages for a home equity loan but there are some downsides that need to be considered while you are at it. One of the disadvantages points that you need to know about home equity loans is that these types of loans require the property to be collateral and in this case, the lender could foreclose the property if the borrower is unable to pay the loan.

Why Does It Take That Long For Home Equity Loan After Purchase?

As mentioned before the normal time for a home equity loan after purchase can take about a month or maybe more than that. There could be various reasons that might affect the overall timing for the home equity loan to be sanctioned.

You should also know the types of home equity loans available that you can have a look at. The first home equity loan is a fixed-rate loan and the other one is (HELOC). A fixed-rate loan means providing a single payment to someone or an individual. The amount that has been loaned could be repaid over a particular period of time at the based agreed interest rate.

In the case of a fixed-rate loan, the interest remains the same and it does not fluctuate depending on the conditions of the market and it remains the same for a lifetime. HELOC, on the other hand, is a variable-rate loan that works almost similar to how credit works.

Equity Loan

If you have opted for a HELOC home equity loan then you will be allowed to borrow a part of the pre-approved amount of money that was offered by the bank. The monthly payments could depend on the amount of money borrowed and also on the interest rate.

There is a difference between the two types of home equity loans and depending upon various things you can look for the most suitable loan that you are looking for.


Make sure you choose the correct type of loan depending on your comfortableness in your financial planning. Many people face different issues only because they face financial issues and thus they are unable to repay the loan amount that they had taken.

There are several benefits for both these loans and you should have a look at them before you select the loan scheme or the type of loan that you want to select. If you are unable to make a certain decision then you can talk to someone who has the knowledge about it.


  1. https://www.sciencedirect.com/science/article/pii/S1042957305000252
  2. https://heinonline.org/hol-cgi-bin/get_pdf.cgi?handle=hein.journals/fedred84&section=54
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Hi! I'm Nidhi.

Here at the EHL, it's all about delicious, easy recipes for casual entertaining. So come and join me at the beach, relax and enjoy the food.


  1. I felt like the post was more focused on the technicalities of HELOCs rather than the benefits or drawbacks

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