I recently stumbled on Figure who claims they are the fastest at approving and funding for HELOC’s, or Home Equity Lines of Credit. Before I continue, Finance Throttle is not sponsored by Figure. I just found them interesting as an alternative to the traditional bank. Figure’s HELOC is powered by the blockchain and operates in 43 states with more coming. With a short online application, you can get approved and gain access to your home equity in as little as 5 days.
Who Is Figure
Figure is a relatively new fintech company revolutionizing the industry through blockchain technology. In just three years, Figure unleashed the first loan origination, equity management, private fund services, and banking and payments using the Provenance Blockchain. To date, they have helped over 30,000 households access more than $2 Billion in equity.
In addition to HELOC’s, Figure offers personal loans, refinancing, crypto-backed loans, crypto mortgage, Figure Invest, and Figure Pay. The last one being similar to CashApp and PayPal. While they are not offering crypto loans and mortgages yet, their website says it’s coming soon. Their crypto mortgage seems like a very interesting option if you already own hundreds of thousands of dollars in crypto. While the 30 year loan requires zero down, you can expect to pay around 6% interest and a monthly collateral fee. This collateral fee goes away when your crypto is worth 125% of the loan amount.
How It Compares To Other HELOC’s
I created a page on Finance Throttle called Top 5 HELOC’s where I update the rates and features of what I believe are the top 5 HELOC’s on a quarterly basis. In fact, I will be updating it this month since we are ending Q1 of 2022. Figure offers a fixed APR as low as 3.25%, but there is a catch. You must sign up for a credit union membership to get a 0.25% discount and autopay for another 0.25% discount after paying a 4.99% origination fee to get a further discount. The state you live in and your credit score will also affect the rate. At the time of this post, the Top HELOC’s offer around 4% variable APR’s or less with discounts.
Figure HELOC’s are available from $15,000 to $300,000. While the $15,000 starting point is normal, the $300,000 limit is low. National banks like Citizens Bank, M&T Bank, and Bank of America allow you to borrow up to $1,000,000 of your equity. Chase Bank allows up to $500,000. Figure’s LTV or Loan to Value ratio is 100%. That is very good considering most banks have an LTV of 80-90%. Traditionally, HELOC draw periods are 5, 10, or 15 years long. Figure’s HELOC offers more flexibility with 5, 10, 15, and 30 year fixed rate products.
While Figure offers exciting new blockchain-based products, their crypto mortgages have a high barrier of entry and their HELOC is not as good as most of the competition.
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