Hitch Logo

HELOC Soft Pull: What It Is and Why It Matters

blog-post

May 7, 2023

Share

email
link
twitter
facebook
linkedin

Home Equity Line of Credit, or HELOC, is a popular financing option for homeowners looking to access the equity in their property. HELOCs offer flexibility and convenience, as they allow borrowers to withdraw funds as needed and pay interest only on the amount borrowed. However, many homeowners are hesitant to apply for a HELOC because they are worried about the impact on their credit score. This is where a HELOC soft pull comes in.

What is a HELOC Soft Pull?

MORTGAGES-BLUE-HOUSE-1024x512.jpg

A HELOC soft pull is a type of credit inquiry that does not affect your credit score. When you apply for a HELOC, the lender will typically perform a hard credit inquiry, which can lower your score by a few points. However, some lenders may offer a pre-qualification process that involves a soft pull instead. During a soft pull, the lender reviews your credit report to determine if you meet their basic eligibility requirements. This process does not affect your credit score, as it does not result in a new line of credit being opened.

Advantages of a HELOC Soft Pull

One of the main advantages of a HELOC soft pull is that it allows you to explore your options without worrying about the impact on your credit score. By pre-qualifying for a HELOC with a soft pull, you can get an idea of the interest rates and terms you may qualify for, and determine if a HELOC is the right financing option for you. If you decide not to proceed with a HELOC, you can simply walk away without any negative consequences.

Another advantage of a HELOC soft pull is that it can save you time and hassle. Traditional HELOC applications can be time-consuming and require a lot of documentation. By pre-qualifying with a soft pull, you can streamline the process and potentially get approved faster.

How to Find Lenders that Offer HELOC Soft Pulls

Not all lenders offer HELOC pre-qualification with a soft pull, so it's important to do your research. You can start by searching online for lenders that offer HELOCs and look for information on their pre-qualification process. Some lenders may advertise this on their website, while others may require you to contact them directly to learn more.

Another option is to work with a mortgage broker. Mortgage brokers can help you compare rates and terms from multiple lenders and may have access to lenders that offer pre-qualification with a soft pull.

If you're considering a HELOC but are worried about the impact on your credit score, a HELOC soft pull may be a good option for you. By pre-qualifying with a soft pull, you can explore your options without any negative consequences and potentially save time in the application process. Be sure to do your research and find a lender that offers this option to ensure you get the best possible terms and rates.

Ready to unlock the value in your home and make smart financial decisions? Get a quote from Hitch today and experience the benefits of our digital HELOC platform. Our streamlined process, personalized approach, and commitment to your financial health make us the ideal choice for your home equity needs. Don't wait, take control of your finances with Hitch. Get a Quote from Hitch Today!

Borrow from yourself, not the bank!

See your equity and HELOC rate in seconds

Equal Housing Lender
Hitch, Inc. 23833672158 NW Toussaint Drive. Bend, Oregon 97703

1. Qualified applicants may borrow up to 95% of their home’s value. This does not apply to investment properties.2. HELOCs have a 10-year draw period. During the draw period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) the total of all accrued finance charges and other charges for the monthly billing cycle. During the draw period, the monthly minimum payments may not reduce the outstanding principal balance. During the repayment period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) 1/240th of the outstanding balance at the end of the draw period, plus all accrued finance charges and other fees, charges, and costs.The lender will calculate this amount by taking the outstanding Account Balance on the last day of the draw period and dividing it by 240 months and then adding any finance charge that accrues but remains unpaid during the monthly billing cycle plus any other fees, charges and costs to the fixed principal payment that is due. During the repayment period, the monthly minimum payments may not, to the extent permitted by law, fully repay the principal balance outstanding on the HELOC. At the end of the repayment period, the borrower must pay any remaining outstanding balance in one full payment.3. The time it takes to get cash is measured from the time the Lending Partner receives all documents requested from the applicant and assumes the applicant’s stated income, property and title information provided in the loan application matches the requested documents and any supporting information. Most borrowers get their cash on average in 21 days. The time period calculation to get cash is based on the first 4 months of 2024 loan funding's, assumes the funds are wired, excludes weekends, and excludes the government-mandated disclosure waiting period. The amount of time it takes to get cash will vary depending on the applicant’s respective financial circumstances and the Lending Partner’s current volume of applications. Closing costs can vary from 3.0 - 5.0%. An appraisal may be required to be completed on the property in some instances.4. Not all borrowers will meet the requirements necessary to qualify. Rates and terms are subject to change based on market conditions and borrower eligibility. This offer is subject to verification of borrower qualifications, property evaluations, income verification and credit approval. This is not a commitment to lend.5. The content provided is presented for information purposes only. This is not a The content provided is presented for information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. Other restrictions may apply.