Navigating the HELOC Maze: Aven Financial, Prosper Funding, Figure, and
Fraction Compared
Choosing
the right Home Equity Line of Credit (HELOC) provider can feel like navigating
a labyrinth. To help you out, I compare four popular options in the lending
arena: Aven Financial, Prosper Funding, Figure, and Fraction. Four newer online HELOC Lenders VS Huntington Bank or your Bank
Interest
Rates:
- Aven Financial: Competitive
rates, often with discounts for existing customers and automatic rate
reductions based on on-time payments.
- Prosper Funding: Rates vary
depending on creditworthiness, but can be competitive for borrowers
with excellent credit (you need a 721 score).
- Figure: Offers a fixed-rate
HELOC with no origination fees, potentially making it attractive for
short-term borrowing.
- Fraction: Rates tend to be
higher than competitors, but they offer unique features like flexible
draw periods and interest-only payments.
Fees:
- Aven Financial: Origination
fees and annual fees may apply, but can be waived under certain
conditions.
- Prosper Funding: Origination
fees and annual fees are common, and vary depending on loan amount
and borrower profile.
- Figure: No origination fees
or annual fees for their fixed-rate HELOC.
- Fraction: No origination
fees, but an annual membership fee applies.
Application
Process:
- Aven Financial: Traditional
application process, requiring documentation and credit checks.
- Prosper Funding: Similar to
Aven, with potentially slower processing times for larger loan
amounts.
- Figure: Streamlined online
application process, with faster approvals but potentially stricter
credit requirements.
- Fraction: Fully online
application with quick decisions, but may require property valuation
and additional documentation.
Features
and Benefits:
- Aven Financial: Offers
various HELOC options, including lines for investment properties and
lines with interest-only payments.
- Prosper Funding: Strong
customer service and educational resources, but limited HELOC
options.
- Figure: Fixed-rate HELOC
offers predictability, but limited draw period and early closure
penalties.
- Fraction: Flexible draw
periods and interest-only options, but high membership fee and
potentially higher rates.
Overall:
- Aven Financial: Good choice
for borrowers seeking competitive rates, discounts, and multiple
HELOC options.
- Prosper Funding: Best for
borrowers with excellent credit who value customer service and education.
- Figure: Ideal for those
seeking a fixed-rate HELOC and quick approvals, but be aware of
limitations.
- Fraction: Worth considering
for borrowers needing flexibility, but weigh the higher costs and
potential rate disadvantage.
Remember
general terms and conditions for second position HELOC:
A HELOC is second position.
1. borrower had to use title insurance and have/had a first and not changed the deed DIY since the title insurance was issued. This means you could not transfer to LLC after doing your conventional loan.
2. Are full
documentation with past two years IRS taxes net income.
Personal, S Corp, LLC all the pages 2022 2021 right now and your 2023 profit and or loss or 1099 and w-2. The whole novel is uploaded.
3. FICO standard desired is 720 mortgage middle score/ some
will go lower with low DTI
4. HELOC is a computer program, borrower fits into the boxes, little to no exceptions. If you have tricky income do not apply to one of these online lenders. You need to go to a mortgage banker who can advise as to where or what shop will accept your personal financial profile. Do not apply at several places and wreck your FICO score as the score is vital to approval.
5. prime + 2 or 3 for owner (prime is 8.5 today) max 22% APR for owner occ is 11.011 APR non owner 13.441
The cost is low to set
up.
Often an automated digital appraisal ~ so the value isn't
going to hit the highest range.
HELOC is variable rate like a credit card amortized over 15
years.
HELOC can be closed if value declines or credit declines...
BEFORE YOU APPLY LET'S TALK - call me 949 - 784- 9699
I won't pull your credit but will help.
