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HELOC Underwriting guidelines

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HELOC Underwriting guidelines

I recently applied for a $250k HELOC with Wells Fargo but was approved for $200k. When I asked why I didn't get my full amount, the processor told me they used a 15 year amortized payment and that payment put me at the limit of my DTI ratio. 


However, my loan is for a 30 year term, with 10 being a draw and 20 for repayment. 


Has anyone ever heard of underwriting using a different term length to qualify income like this? How does this even make sense?


Thanks for any input!

Message 1 of 3
Senior Contributor

Re: HELOC Underwriting guidelines

I haven't heard of this!


Maybe the agent is confused or mixing up facts?  Or maybe there was an initial misunderstanding about the product you were getting or receiving?


The first HELOC I got took several weeks for the funds to be available.  I never understood that becuase the property was paid for, I had gone to closing, and it should have been a 3 business day turnaround.  I think that product was a 10 year draw, 15 year payback.


The second HELOC I just got is appearing to go down a similar path.  I closed two weeks ago, the property didn't have a mortgage on it, and the funds are still not visible online.  Nor, have I received checks.  Apparently they don't do checks anymore.  That product is a 10 year draw, interest only, 10 year payback.  The LO said if I REALLY need money now, to let him know, and he will push through a manual withdrawal from the HELOC and put the funds into my checking account.


You have copies of your paperwork...double check to see what you applied for and what you were approved for.  

Message 2 of 3
Moderator Emeritus

Re: HELOC Underwriting guidelines

I don't think there's much in the way of oversight or standardization for HELOC's TBH.  I'd be happy to be proved wrong but they vary a lot between lender to lender even with the few I researched.  Hadn't heard of your situation though admittedly.

Message 3 of 3
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