HELOC Application Process FAQs

To apply for a HELOC you will need:

• Your current employment information
• An estimate of your home's value
• Your co-applicant's personal and employment information, if applicable

Applying for any loan may affect your credit score because it requires a “hard” credit pull, which is an inquiry made by a lender to approve a credit application.

No. BECU does not charge origination fees² for HELOCs, including application fees.

You don't have to be a member to apply, but the primary applicant will need to become a member² before the loan is funded. Membership must be established before the online loan application can be finalized.

You can apply for a HELOC at any BECU location or by calling 844-BECULOANS. Existing BECU members can also apply in Online Banking.

The HELOC application process can be broken down into three stages: Application processing, document signing and HELOC account funding.

1. Application processing: During this stage, a processor reviews your application and orders property and flood reports. They may also order a property condition report and an appraisal. Your processor will contact you to address any outstanding items after they review the reports. 
2. Document signing: We will contact you to set up an appointment when your HELOC documents are ready to be signed.
3. HELOC funding: If the subject property is your primary residence, your HELOC will fund after the right of rescission has expired in three business days. If the subject property is non-owner occupied, the HELOC will fund once we have received the signed loan documents and they have been cleared for funding.

This is a legal right provided by the Truth in Lending Act that allows borrowers to cancel a primary residence loan request without repercussion within three business days of signing loan documents. This right applies to certain home financing types including HELOCs and home loans.

We typically process HELOC applications within 21 business days. Certain factors, like unexpected liens or ownership discrepancies revealed in the property report, may delay the process. Promptly providing us any requested documents will help expedite your application.

A processor will order a property report, which shows the current ownership of the subject property and any liens against the property. They will also request a flood report to determine if your property is in a flood zone.

Other reports may be required, including a report on the condition of your home's exterior. If this is required, you may see an appraiser drive by your property to take photos.

Your processor will work with you to ensure you have proper flood insurance coverage.

The majority of HELOC applications use an automated valuation. BECU requires appraisals under certain situations based on lending guidelines, such as loan amount or home type, or if the automated valuation is not available. Your processor will let you know if your home requires an appraisal. BECU does not offer appraisals upon request.

Exterior appraisals only assess the outside of your home and do not require an appointment. The appraiser will take photos of the home's exterior and research your property using county records and other online data sources. If you live in a gated community, the appraiser will call you directly to arrange their visit.

Interior appraisals require an appointment for the appraiser to view the interior of your home. The appraiser will take photos of the inside and outside of your home as well as any auxiliary structures on the property. They will check that your water heater is properly strapped, and carbon monoxide and fire detection is in place as applicable. The appraiser will need access to all rooms in the home to complete their report.

Manufactured home appraisals require an appointment for the appraiser to view and photograph the interior and exterior of your home. They also need photos of the data plate and HUD tags. The data plate provides important home information and is usually in a closet or cabinet. HUD tags are metal tags located on the outside of each section of the home confirming it meets HUD's manufactured home construction and safety standards.

The appraiser will finish their research and submit the report to our appraisal management company. Your processor will send you a copy of the report when it is available, usually around seven business days after the appraisal date.

Yes, BECU requires members to maintain insurance coverage for any property used as collateral on a loan. BECU requires at least one borrower to be listed on the insurance policy.

We will request an updated insurance binder showing BECU added as loss payee/mortgagee with the HELOC loan number included. An insurance binder is a document issued by an authorized insurance representative that serves as proof of insurance.

You will need to provide a copy of your condo's master insurance policy. If you don't have a current term copy you can usually obtain a copy through your Homeowner's Association (HOA). The master insurance policy should include dwelling coverage replacement as well as “walls in coverage,” which covers interior improvements.

You will need to obtain this coverage, often referred to as an HO-6 condo owner's policy, before we can process your HELOC application.

Please visit Handling the Finances of a Deceased Person for guidance. Your HELOC application is valid for 45 days. If you are unable to obtain the necessary documents in time or the property is in the middle of a legal process, you will need to reapply once you have the documentation.

You need to reapply for the HELOC after probate is completed. At that time you will need to provide the following:

• Declaration of Completion of Probate
• Will (if applicable)
• Certified death certificate

Please visit Handling the Finances of a Deceased Person for more guidance.

If your spouse is willing to sign as a non-borrower, then you can proceed. Your spouse would not be liable for the loan or able to access the HELOC. If your spouse is unwilling to sign the documents, then the property is not eligible, and you will need to reapply after the legal separation or divorce is final.

You need to provide the decree of legal separation or divorce and any additional documents or exhibits the decree refers to. For example, if the decree refers to a separation agreement or an exhibit that includes the separation of property, you will need to provide those documents.

We need proof that the additional owner no longer has an interest in the property, including any monetary judgments and awards ordered by the court.

If they were not awarded ownership in the property, they no longer have the right to sign.

You need to provide proof of payment. For a monetary judgment, this means providing a filed Satisfaction of Judgment from the court. If it is a monetary award, you should include a settlement statement from a previous refinance, or a notarized letter from the spouse/ex-spouse confirming payment.

The monetary judgment or award can be paid with HELOC funds. An escrow agent will be required to help close the loan, which will extend the application processing time. The escrow agent will:

• Verify the payoff amount.
• Ensure your spouse/ex-spouse receives their payoff directly from the HELOC funds.
• Collect any additional paperwork required from the spouse/ex-spouse, such as a Satisfaction of Judgment or Reconveyance of a Divorce Lien, as applicable.

A non-borrowing owner is an owner of the property who is not named as a borrower on the HELOC application.

We will mail disclosures for the non-borrowing owner to the primary applicant's mailing address.

Yes, non-borrowing owners need to sign some of the closing documents.

The non-borrowing owner does not have an obligation to pay the loan, but they need to agree to the home being used as collateral for the HELOC.

A non-owning spouse is married to a property owner, but is not an owner or borrower on the HELOC application.

They need to sign the non-owning spouse attachment in the presence of a notary. Community property states – including Washington, California, Arizona, Idaho and Texas – require acknowledgment from the non-owning spouse when a property is used as collateral for a loan.

They should only sign the non-owning spouse attachment.

The non-owning spouse does not have an obligation to pay the loan.

You can proceed with a HELOC if the trust was established outside of Washington state, provided the property is in one of the following states: Washington, Oregon, California, Idaho, Arizona, Kansas, Missouri, Illinois, South Carolina or Pennsylvania. The trust must have been established in one of those states as well.

We do not need to review your full trust agreement. However, you will need to provide a Certificate of Trust for review.

All borrowers are required to be a trustee.

The spouse of a trustee is not required to sign any documents.

Trustee names must be listed in the property ownership records. Trusts can only own real estate through trustees (e.g., John Doe, as trustee of the John Doe Trust).

You cannot use power of attorney to sign closing documents for a trustee.

You need to establish a trust membership account. Residents of Washington state can establish membership at the time of the loan signing. If you are outside of Washington state, you have to establish membership before you sign.

All borrowing trustees and non-borrowing trustees who signed loan documents will have access.

Lien position, also known as lien priority, is the order in which a lender's claim to a property is recognized in the legal system. A lien in first lien position is considered superior to a lien in second lien position.

The BECU HELOC lien is required to be in the first or second lien position. Additional liens on the property may need to be paid off or subordinated to ensure the HELOC lien maintains a lien position within guidelines.

A judgment is the formal decision or ruling made by a court or legal authority at the conclusion of a legal proceeding.

Court judgments filed against a person may become a lien on any real estate owned by that person in that county.

We cannot proceed with a HELOC application when there is a judgment lien in a superior position.

Judgments belonging to someone with a similar name to yours sometimes show on a title report. Please reach out to your processor for next steps.

To have the judgment removed from the title, you need to record a Satisfaction of Judgment with the appropriate county office.

Yes a judgment can be paid with HELOC funds. An escrow agent will be required to help close the loan to ensure the completion and record of the Satisfaction of Judgment. This will extend the application processing time.

BECU covers the escrow fee as a benefit of membership.

A private lien is a lien attached to your property, typically used to secure a loan or interest in the property by an individual or small business.

We cannot proceed on a HELOC application with a private lien in a superior position. The private lien would either need to be paid off with the loan proceeds or subordinated to BECU's HELOC lien. Either option would require closing with an escrow agent which will extend the processing time.

You need to provide the private lienholder's contact information to your loan processor. The escrow company handling the payoff will coordinate with the lienholder to obtain the payoff amount, ensure the funds are distributed to the private lienholder after the loan has been funded, and file the paperwork to have the lien removed.

You should contact your private lienholder to see if a subordination to BECU's proposed HELOC is an option. If it is, please provide the private lienholder's contact information to your BECU loan processor. The escrow company handling the subordination will contact the private lienholder to prepare the subordination documents and ensure they are properly recorded at closing.

BECU covers the cost to close through escrow as a benefit of membership. However, any fees the private lienholder charges you as part of the transaction would be your responsibility.

A payoff means a loan is paid in full and closed. A paydown refers to paying down the balance on an open-ended loan balance.

BECU lending guidelines may require you to pay off or pay down other debts before we can approve you for a HELOC.

Your processor will confirm whether BECU is paying the lender directly or if you need to pick up the payoff check from the BECU location you specify. It is important to continue to make your regular payments until you confirm the other lender paid or closed the loan.

You should discuss your options with your processor.

Lenders attach Uniform Commercial Code (UCC) liens to a property to secure a loan. These loans are typically for down payment assistance or home improvements, such as solar panels, siding, roofing, HVAC systems, or windows.

A UCC lien may need to be paid off with the loan proceeds or subordinated (see below) before we can proceed with the HELOC application.

Contact the UCC lienholder to request a 30-day payoff letter to send to your BECU loan processor. The loan processor will arrange to pay the UCC lien off with loan proceeds at closing.

Paying off a UCC lien with the HELOC loan proceeds is a better option than paying it off yourself. If you pay off the lien before the HELOC closing, we will be unable to proceed until the lien is removed, which takes time. Your application approval could expire.

Contact your UCC lienholder to see if subordination to BECU's proposed HELOC is an option. If it is, please request subordination instructions and requirements from your BECU loan processor. Be advised that subordination requests will extend the processing time.

After you confirm the UCC lienholder is willing to subordinate, we will provide the documents the lienholder needs for the subordination request. We can send them on your behalf if you sign a BECU Borrower's Authorization form. Your processor will provide the form.

We do not charge a fee, but your UCC lienholder may charge a fee for the subordination. You would be responsible for paying this fee.