Is Figure a Good Loan Company? What to Know Before Applying

Figure is a financial technology company and online lender offering various financial solutions. This article provides information on Figure’s products, application process, and loan management.

Figure’s Financial Products

Figure offers a range of financial products, primarily focusing on home equity solutions. Their flagship offering is the Home Equity Line of Credit (HELOC), which allows homeowners to tap into their home’s equity. Unlike traditional HELOCs, Figure’s HELOCs often feature fixed interest rates, providing predictability in monthly payments. These HELOCs can be used for various purposes, including home improvements, debt consolidation, or other significant expenditures, with loan amounts potentially reaching up to $750,000.

Figure also provides Debt Service Coverage Ratio (DSCR) loans for real estate investors. These loans are designed for investors who can use rental income from their properties to qualify, rather than relying on traditional employment income verification. DSCR loans require a debt service coverage ratio greater than 1.0. Figure also offers cash-out refinancing options, allowing homeowners to refinance their existing mortgage for a new, larger loan and receive the difference in cash.

Eligibility and Application Requirements

Prospective borrowers must meet specific eligibility criteria and gather necessary documentation. Common factors include credit score, debt-to-income (DTI) ratio, employment history, and residency. A minimum credit score of 640 to 680 is required for HELOCs, with higher scores often leading to better terms. Borrowers also need to demonstrate a reliable payment history and sufficient home equity for home-secured products.

Applicants must be employed, self-employed, or retired. The debt-to-income ratio, which compares monthly debt payments to gross monthly income, is a significant factor, with lower ratios preferred. Applicants need to provide proof of income, such as pay stubs or tax returns, along with bank statements to verify assets. A valid government-issued identification, like a US Driver’s License, US State ID, or US Passport, is also essential.

The Loan Application Process

The loan application process with Figure is largely digital. It begins with creating an account on Figure’s online platform. Applicants then input personal and financial data directly into the online application, including details about their property, income, and existing debts.

Digital verification steps are integrated into the process, often involving connecting bank accounts to confirm identity, assets, and income automatically. Following submission, the application moves to verification and underwriting stages, where Figure assesses the provided information and the property’s condition. Communications from Figure, including approval or denial, are provided online, with funding often occurring within five business days for HELOCs once complete.

Understanding Loan Terms and Servicing

Upon approval and funding, borrowers should understand the financial terms governing their loan with Figure. Interest rates for Figure’s HELOCs are fixed, meaning they do not change over the life of the loan. The Annual Percentage Rate (APR) reflects the total cost of the loan over its term, encompassing the interest rate and certain fees.

Figure charges an origination fee, which ranges from 0% to 4.99% of the initial draw amount, depending on the borrower’s credit profile and the property’s location. This fee is included in the loan payment schedule. Borrowers may also incur costs for valuation, manual notarization, and state-specific recording fees or taxes.

Loan repayment schedules vary by product, with HELOCs offering terms up to 30 years. Monthly payments are made through an online portal, with an option for automatic deductions from a designated bank account. For ongoing loan management and support, borrowers can access their account online or contact Figure’s customer support via phone or email.