November 11, 2018 / Hollie Shuttlewood
Figure is a fintech company that uses blockchain, artificial intelligence, and advanced analytics to provide consumer credit products. Founded in 2018, it offers its own unique versions of home equity loans (HELs) and reverse mortgages. By leveraging blockchain, the same technology that powers cryptocurrencies like Bitcoin and Ethereum, Figure is able to approve HEL applications immediately – and to send the funds to the borrower within 5 days.
- Specializes in home equity loans
- Leverages blockchain and AI for faster approval
- No ongoing fees
The most noticeable thing about Figure’s automated online platform is that it’s quick… really quick. Applicants need only fill out the bare basics to get an offer: name; email; date of birth; salary; property address; property type (primary residence, second, home or investment property); financing purpose (debt consolidation, home improvement, major purchase, or other); and, if Figure can’t pull up your credit based on the information provided, your social security number.
Once you accept the terms and conditions, Figure’s AI-powered platform will run a soft credit check (without affecting your credit score) and show you your pre-qualified rates with columns for term, APR, and monthly payment. You’ll get a choice of 5-year, 7-year, 10-year, or 15-year terms, with lower APRs for shorter terms and higher APRs for longer terms. If you see a loan you like, select it to complete the application.
On the next screen, you’ll be asked to verify your identity by taking a photo or uploading your ID. Next, you’ll be asked to enter details of the bank account where you’d like Figure to transfer your funds. Finally, you’ll be redirected to a video chat with an e-notary, where you’ll e-sign your loan documents and finalize the HEL.
That’s it! The whole process takes around 5 minutes – which is much quicker than applying for a home equity loan from a traditional lender.
Figure’s AI-powered platform makes it easier and quicker than ever before to get approved for a home equity loan. By cutting down on overheads like physical branches and manual assessment of each and every application, Figure is able to pass on the savings to the customer – and it does so with very competitive rates and APRs.
Given it was only founded in 2018, Figure is still very much in its experimental phase, and as a result it only offers HELs and related products to residents in 30 states (see image). It doesn’t offer any type of first mortgage (such as fixed-rate mortgage, ARM, or jumbo loan). And it doesn’t offer its products to residents in the remaining 20 states. However, it’s constantly growing, so it’s only a matter of time before Figure starts servicing all 50 states with a wider selection of mortgages and loans.
Figure offers two types of loans: Figure Home Equity Loan PLUS, its take on traditional home equity loans, or HELs; and Figure Home Advantage, its take on reverse mortgages for ages 62 and older. It also offers AI-driven wealth management solutions, helping customers build low-cost, risk-savvy, diversified portfolios.
Its HEL Plus includes the following features:
- Loan values of $5,000 to $100,000.
- Combined loan-to-value (CLTV) up to 80% (meaning the borrower must have at least 20% equity in their property after the loan amount is taken into account)
- Minimum credit score of 680
- Can be used to pay for debt consolidation, home improvement or renovation, major purchases, or other significant expenses.
- No ongoing fees, appraisal fees, late fees, or pre-payment penalties
- Low origination fees
Figure Home Advantage is a spin on reverse mortgages, allowing retired homeowners to tap into their equity to borrow large sums. Homeowners must meet the U.S. Department of Housing and Urban Development’s eligibility requirements for reverse mortgages, meaning they must be at least 62 years old, must own their home outright or have a small balance due, and must occupy their home as their principal residence. Eligible homeowners can join the waitlist to get notified when the program becomes available in their area. It includes these features:
- Simplified sales process, resulting in low fee
- Customizable lease terms to fit the borrower’s requirements
- Borrower can turn equity into monthly retirement income Or income-oriented investments
- Home buy-back options allows borrowers to buy back home in future should their plans change
Figure’s HEL Plus offers competitive fixed-rate loans to homeowners with credit rates of 680 and higher. The average APR is 5.99% to 10.5%. There are 4 term options: 5 years, 7 years, 10 years, and 15 years. The shorter the term, the lower the rate. APRs are fixed, meaning you’ll pay the same interest for the life of the term, even if lenders hike their interest rates during that time.
Applicants can get in touch with Figure via any of the following channels:
- Phone: 888-819-6388
- Email: firstname.lastname@example.org
- Mail: Figure Technologies, Inc. 650 California St, Suite 2700, San Francisco CA, 94108
Figure presents us with a window into the future of lending and mortgages. For most of American history, the only way a person could get a mortgage or loan was through the banks or traditional lenders in what was often a tiresome and expensive application process. In the 21st century, online lenders have disrupted the industry, cutting out most of the overheads of the traditional lenders and passing on most of the savings to consumers. By leveraging technologies like AI and blockchain, Figure and other Silicon Valley firms are further streamlining the lending process, resulting in significantly reduced APRs, fees, and waiting times – and benefiting borrowers