A Guide to Securing a HELOC Without a Joint Application

We guessed it right! You are a person who wants to make the most out of your home equity, but wondering if you can do it without dragging your spouse into the picture? Luckily you can! But you need to know the documents required and how it works before jumping in.

Keep reading and get your HELOC approved without a joint applicant.

What Is Joint Borrowing?

Joint borrowing or joint application means that two or more people team up to get a HELOC together. This means they both agree to share the responsibility for paying off the debt.

• Each applicant under this HELOC account will be required to pay off their loan on time.

• Joint borrowing is helpful for people who want a supporting hand to improve their chances of approval.

• Usually, it’s married couples who get a joint application, but really, anyone can team up to borrow money together. Lenders can't treat unmarried people who borrow together any differently than married couples who do.

Disadvantages Of Joint Borrowing

Having a joint-applicant is not always the wise choice because:

• Everyone involved is responsible for repaying the loan, so if one person can't pay, it affects everyone. Also, it hurts everyone's credit scores, not just theirs.

• Money issues can cause tension or even damage relationships between the borrowers involved in the joint application.

• It's harder to manage a loan with multiple people because you have to coordinate payments and other tasks with everyone.

So, if you’re planning to take out a HELOC all by yourself without adding another borrower as a co-applicant, make sure to check if the process of getting a HELOC would be any different.

5 Steps To Secure A HELOC Without A Joint Application

The good news is that HELOC lenders treat all applications equally, regardless of whether you have a joint applicant or not. In certain cases, the process might vary in terms of documentation and other fees involved but otherwise, the process is the same for all.

• 1. Fix Your Credit Score

  To do this, you will need a credit report first! Get your free copy here.

  Once your report is ready, review it carefully for errors. If you find any mistakes that are impacting your credit score, begin the process of correcting them.

  Plus, pay down your credit card balances and keep them low before applying for a HELOC.

• 2. Shop Around & Compare Quotes

  Do your research and find out all the best home equity loan lenders who offer better terms as per your requirements. This phase plays a very important role in your application.

  After getting your quotes, compare them and choose the one that best fits your needs and financial situation.

• 3. Get Ready To Apply

  Next, it's time to fill out the HELOC application. Online applications are usually quicker. Sometimes it just takes 15 minutes.

  However, keep in mind that the process involves you providing detailed information about your finances and may require a new appraisal of your home, so approval won't be instant.

  Here’s a list of documents you need to apply for a HELOC.

• 4. Wait & Get Approved

  Your approval might usually take a few days to weeks. This depends on how strong your application is. If certain documents are yet to be submitted and if there’s any false information, you might face challenges during the approval process.

  Be patient because your approval is also influenced by the underwriting and home appraisal process.

• 5. Close Your Loan

  Upon approval, you will close your loan by paying fees & reading all the terms and conditions carefully.

  You'll have to wait until the third business day after closing to get your funds, which is called the "rescission" period.

  During this time, you can still change your mind about the HELOC, except if it's tied to a home that isn't your main residence.

Should You Get A HELOC With Or Without A Joint Application?

When you apply solo, make sure you meet all your lender’s requirements. If not, adding a joint applicant can improve your chances of approval and offer lower interest rates.

But, if you and your joint applicant don’t collaborate and manage the usage and repayment properly, your house might be at risk.

Advantages Of HELOC Without A Spouse

Opting for a HELOC without a spouse can offer several advantages, providing greater flexibility and control over your finances.

• 1. Independent Financial Decisions

  When you apply for a HELOC without a spouse, you retain full control over your borrowing decisions. You can manage the line of credit according to your financial goals and needs without the need for joint agreement or compromise.

• 2. Protecting Individual Credit

  If your spouse has a lower credit score or a history of financial challenges, applying for a HELOC on your own can safeguard your individual credit score. This can be particularly beneficial if you have a strong credit history and wish to maintain it or improve your credit profile.

• 3. Streamlined Application Process

  Applying for a HELOC as a sole borrower can simplify the application process. You won't need to gather additional documentation or rely on your spouse's financial information, potentially expediting the approval process.

• 4. Avoid Liability Concerns

  You're solely responsible for the debt incurred. This means you won't be held liable for any missed payments or defaults on the loan, offering peace of mind in case of financial difficulties or changes in your relationship status.

• 5. Privacy And Confidentiality

  Choosing a HELOC without a spouse ensures financial privacy and confidentiality. You can keep your borrowing activity separate from your spouse's financial affairs.

HELOC Requirements 2024

If you’re aiming for a 100% approval rate for your HELOC, make sure you meet these requirements below so that you can borrow HELOC from the top home equity lenders in town!

• ➙ You need to have at least 15% equity in your home.

• ➙ The Debt-to-income ratio must be 43% or less.

• ➙ Your credit score should be more than 600.

• ➙ You must maintain a history of timely bill payment.

• ➙ Your income will be verified.

Why 9.1% Of Joint Applications Get Rejected?

Let’s analyze the data! Here are the common reasons -

• Credit issues

• Change in employment status

• Debt-to-income ratio

We don’t want you to be one of them! Make use of these tips below for a successful HELOC approval without your spouse.

Should You Make The Move?

Yes, you can go ahead! As discussed above, all applicants are treated equally. While a joint application may offer benefits such as improved approval chances and lower interest rates, it also comes with potential downsides like shared liability and complexities in managing the loan.

Choosing a HELOC without a spouse provides unique advantages, including greater control over financial decisions, protection of individual credit, and streamlined application processes.

Lastly it’s up to you to carefully weigh these benefits against the requirements and considerations outlined in the application process. Read our blogs, if you’d like to gain some more clarity before starting your HELOC application process.