HELOC closing costs: Understanding costs and fees

If you are looking to get a home equity line of credit, or HELOC, you will want to know whether HELOCs have closing costs and how much you should save for them.  

HELOCs do come with closing costs, and you should plan to save from 2% to 5% of your loan amount to cover the costs. 

The exact closing cost of your HELOC can vary based on your home, the state you live in and the lender you choose. Some states and lenders will have requirements that others don’t. The exact area and size of your home could also cause your closing cost to vary within that 2% to 5% range. 

If you are looking for a better idea of what your closing costs could cost you based on your situation and property, it’s best to connect with a Loan Officer.  

Loan Officers can not only walk you through the loan process but also help answer any questions you may have. If you are looking for an estimate of closing costs, you can use a HELOC calculator to get an estimate of what you could borrow and take 5% of that number to estimate the costs.  

To start the HELOC process or to talk with a trusted Loan Officer to learn what your closing costs could be, you can begin your HELOC application today! 

These are factors that could contribute to your HELOC closing costs, and here is a breakdown of what you could expect to pay before receiving your funds. 

Home appraisals are an important part of the HELOC process, as it shows your home’s current value and will determine the amount you can borrow. Appraisals are paid for by the borrower and usually rolled into your HELOC’s closing costs. 

Home appraisals can range in value, but you can expect to pay anywhere from $350 to $550. The appraisal price can be higher with larger or unique homes. 

During your HELOC application process, lenders will pull your credit report to check your credit score and history. Creditors will charge for every credit report checked. If you are applying for a HELOC with someone else, you will pay per credit report pulled. 

Pulling your credit report typically costs anywhere from $25 to $75. 

Origination fees cover the cost of your lender underwriting and processing your loan. This will be an upfront cost to get your application started. Originator fees can vary based on your lender.  

Some lenders charge a flat fee while others will charge a percentage of your loan amount, usually around 0.5% to 1.0%. 

A notary fee covers the cost of an individual being present to sign your documents and certify that it is all legally binding. Your notary fee will vary based on which state you live in. On average, this cost ranges from $100 to $150. 

While some states do not require attorneys to review your HELOC documents, other states make it mandatory. Even if it is not required in your state, some borrowers choose to have an attorney review their documents. 

This will typically cost you your attorney’s hourly fee, which can range from $100 to $300. 

Title insurance is protection in case a previous owner tried to make a claim against your property. But not all lenders require you to get title insurance. If your lender requires you to get title insurance, you could expect to pay 0.1% to 1.0% of your loan amount.  

A title search checks public records to confirm homeownership and see if there are any liens or other claims on the property. Title searches can cost borrowers $100 to $300, depending on location. 

Yes, home equity loans also come with closing costs. Those looking to get a home equity loan can expect having a closing cost of 2% to 5% of their total loan amount. 

Even though HELOCs and home equity loans are different, the closing costs for both are fairly similar. Those looking to get either a HELOC or home equity loan can typically expect to pay between 2% and 5% in closing costs. 

There are a few things borrowers worried about the closing cost price could do to lower that amount when getting a HELOC. 

Increasing your credit score or lowering your debt-to-income ratio may help you qualify for better interest rates and could potentially reduce origination fees, though many closing costs (like appraisals and notary fees) are typically fixed. 

Some lenders offer no-closing-cost HELOCs, but this option could come with higher interest rates. This means that you could end up paying the closing cost amount, or more, over the life of your loan. 

The other thing you could do to reduce your HELOC closing cost is talk to your lender. Some lenders are more open to negotiating closing costs and fees. They may even offer rolling the closing costs into your HELOC amount. 

To find out what your closing costs will be, connect with a lender and start your HELOC application online today. 

_{Information provided is for educational purposes only. It should not be construed as financial or legal advice or instruction. Rate does not guarantee or assume liability for the accuracy, completeness or timelines of the information. You should conduct additional research before making any mortgage related decisions.} 

_{Applicant subject to credit and underwriting approval. Restrictions apply.} 

_{Rate home equity line of credit (HELOC) is an open-end product where the full loan amount (minus the origination fee) will be 100% drawn at the time of origination. The initial amount funded at origination will be based on a fixed rate; however, this product contains an additional draw feature. As the borrower repays the balance on the line, the borrower may make additional draws during the draw period. If the borrower elects to make an additional draw, the interest rate for that draw will be set as of the date of the draw and will be based on an Index, which is the Prime Rate published in the Wall Street Journal for the calendar month preceding the date of the additional draw, plus a fixed margin. Accordingly, the fixed rate for any additional draw may be higher than the fixed rate for the initial draw. This product is currently not offered in the states of New York, Kentucky, West Virginia, Delaware and Maryland. The HELOC requires you to pledge your home as collateral, and you could lose your home if you fail to repay. Property insurance is required as a condition of the loan and flood insurance may be required if your property is located in a flood zone. Borrowers must meet minimum lender requirements in order to be eligible for financing. Available for primary, second homes and investment properties only. Dependent on minimum credit score and debt-to-income requirements. Occupancy status, lien position and credit score are all factors to determine your rate and max available loan amount. Not all applicants will be approved. Applicants subject to credit and underwriting approval. Contact Rate for more information and to discuss your individual circumstances. Restrictions Apply.}