HELOC pulls

[vanillabean]

Does applying for a HELOC generally result in inquiring one, two or three agencies?

[RobertEG]

It depends upon the creditor and the amount of the requested credit.

[iv]

As Robert said, it will vary - unlike a conventional loan where 99+% of the time you'll have a standard tri-merge using the Fannie/Freddie/etc mandated scores from all three CRAs.

As a random data point, last year Wells Fargo pulled a single Experian v2 score/report for a $200k HELOC.

[Anonymous]

US Bank pulled only EX for heloc app earlier this year (decided to refi with someone else instead). 

[vanillabean]

---

@iv wrote:

As Robert said, it will vary - unlike a conventional loan where 99+% of the time you'll have a standard tri-merge using the Fannie/Freddie/etc mandated scores from all three CRAs.

As a random data point, last year Wells Fargo pulled a single Experian v2 score/report for a $200k HELOC.

---

Thanks for your feedback. It's quite a HELOC you got there! I trust your mortgage was paid off beforehand to qualify for the LTV 43% threshold? Also, how have various balances on your HELOC impacted your FICO scores so far if you happen to know?

[iv]

---

@Anonymous-own-fico wrote:

Thanks for your feedback. It's quite a HELOC you got there! I trust your mortgage was paid off beforehand to qualify for the LTV 43% threshold? 

---

No, the primary mortgage was still active at the time (although it was within a year or two of being paid off, and has since been paid).  We used the HELOC to pull cash from the property for the down-payment on the next one. (Avoiding the pain of coordinating multiple closings!)

The LTV (Loan-to-Value) for most HELOCs (well, CLTV, including primary and the LOC) is usually around 85%.

43% is a number more commonly seen when discussing DTI (Debt-to-Income), but yes, we did also keep DTI below 43% with mortgage+HELOC+new mortgage (plus far too much property tax... NJ).

---

@Anonymous-own-fico wrote:

Also, how have various balances on your HELOC impacted your FICO scores so far if you happen to know? 

---

Other than the inquiries and new accounts during that time period? Hard to say, since there was a max draw at opening, and it hasn't dropped below $195k yet...  I was at 850s on FICO 8 before the HELOC, and dropped to 847/841/837 after both the inquiry and the HELOC (at 100% util) first reported.  After that, we opened the mortgage on the new property (and a new CC), and scores dropped to the 820s in the sig below.

I can confirm it does NOT count as revolving credit (at least for one this size) - if it did, revolving utilization would have gone north of 50%. (And I know from recent testing that if I let even 20% report on cards, the FICO 8 scores drop to the 790s.)

Also useful data if you plan to rate-shop - the inquiry for the HELOC was NOT coded as a mortgage inquiry ("Unspecified - general bank"), and would not have been de-duped.

[vanillabean]

Sorry, yes I meant to write DTI 43% and 80% LTV. Does the HELOC account too have a narrative attached to it on the credit reports, and how is it coded across the agencies? Also, I hear Wells Fargo underwriting can make you go in circles, because they are too big to fail and as such don't care. Has that been your experience? You probably received the standard conditional approval at some point and hopefully smooth sailing from then on?

[iv]

---

@Anonymous-own-fico wrote:

Does the HELOC account too have a narrative attached to it on the credit reports, and how is it coded across the agencies?

---

It appears with the standard payment/balance/etc data any other mortgage/loan/card does, but the loan/account type coding varies slightly across CRAs:

Equifax:

Creditor: WELLS FARGO HOME EQUITY (Billings MT)

Type of Account: Line of Credit

Type of Loan: Home Equity Line of Credit

TransUnion:

Creditor: WELLS FARGO BANK (Billings MT)

Account Type: Line of Credit Account

Loan Type: HOME EQUITY LOAN

Experian:

Creditor: WELLS FARGO BANK (Winston Salem NC)

Type: Home Equity

---

@Anonymous-own-fico wrote:

Also, I hear Wells Fargo underwriting can make you go in circles, because they are too big to fail and as such don't care. Has that been your experience?

---

No, not even slightly.

I've also heard plenty of horror stories, many right here on these forums, and while I believe them... we didn't have any issues. Far from it.

Most of those stories seem to involve a combination of an undertrained loan officer, inexperienced borrower, and/or complicated deal (property issues, income issues, documentation issues...).  

We dealt with a "career" LO, not a short-term paper-shuffler, who knows the process as well (if not better) than the processors and underwriters.

We also went into the process prepared, with (almost) all of the needed docs in-hand and already scanned before calling.

It went very quicky:

• Submit docs to LO on Tuesday, Experian is pulled, and they send a link to the secure doc upload site with additional doc requests (which we sent immediately)
• On Thursday loan processor calls to do intro to secure upload site... you can hear the gears changing when we mention we saw that and uploaded them already.  Processor immediately starts on the file.
• On Friday they request (via the secure site) the one doc we forgot (oh well...) - HOA Master Insurance Policy.
• Monday, get/scan/upload HOA Master Policy
• Tuesday, HOA Policy marked approved, only waiting on (drive-by) appraisal
• Thursday, processor check-in, confirming all docs, LPoA for online closing, still just waiting on appraisal.
• Friday, appraisal complete and final approval

That's 9 business days from application to final approval.

Closing was then done online the following week (and a paper check was mailed - that's the only part that seemed slow).

So... uncomplicated file, experienced LO, and well-prepared borrowers?  WF can be very, very good.

To find a good LO, ask locally for personal recommendations.

To be better prepared borrowers, do the research (including right here!)

For the file... well, some properties and/or borrowers are just plain complicated.

That's why a good LO and personal preparation is important.

[vanillabean]

Thank you very much for the detailed outline. Happy to hear WF works when you’re prepared and with the right LO.

I see that WF has recently moved out of the home equity loan business. As your case was before then and as you maxed out from day one, I am curious what made you choose a line of credit over the loan?

[iv]

---

@Anonymous-own-fico wrote:

Thank you very much for the detailed outline. Happy to hear WF works when you’re prepared and with the right LO.

I see that WF has recently moved out of the home equity loan business. As your case was before then and as you maxed out from day one, I am curious what made you choose a line of credit over the loan?

---

The APR for taking a Fixed Rate Advance from the HELOC at opening ended up lower than the APR for the HEL would have been.

(Fixed for three years, then starts floating like a normal HELOC... but the property will be sold and the HELOC paid prior to that.)