Bill, I agree with you that if you have a HELOC you should borrow the max out of it and then "invest" the proceeds in some kind of other asset where the money could be accessed if necessary. Why take a chance on a lender who may "cancel" or "freeze" your line of credit?

Bill Roberts

Ouch!! I took out a HELOC last year and maxed it out the next day. I did just as Bill Roberts suggested and placed in an easily accessible investment. I never really gave it much thought it just seemed to make sense.

Bill R. and Bryan,

Makes you think doesn't it.

We use to use short term notes (30 to 180 days) with only a promise thet the bank would renew them.

We use to be stupid!

Those Money Merge people still are.

HELOCs are a great tool for many people, but you can't depende on the bank.

Bill

From money.cnn:

"To head off more defaults, Countywide sent out letters to 122,000 homeowners last week informing them that their home equity credit lines were shut down since their estimated home values had dropped below their loan amounts."

So, here's my advice:

Take the money while you can and set your house on fire!!!

Home equity credit lines: seeing through the fine print 

Borna,

Great information.

To bad I can't say the same about your final though.

Bill

The Washington Post had an article last week about how local banks are terminating HELOCS by the thousands, even people with good credit.  Some people are so paranoid about losing that access to credit that they are tapping-out their credit lines just to be sure they have the money available as they counted on their HELOC to be an emergency fund.

Tred,

Thank you.

There are still people selling this money merage non-sense! You may just have save many people.

Bill

Here is a new wrinkle - National City is now not allowing people to refinance their 1^st mortgage and keep their reduced HELOC in 2^nd lien position (basically no subordinations).  I would imagine that this concept will grow and other banks will follow suit soon.

Jim,

That sounds like an all round winner! By reducing the "First" the home owner will be more likely to be able to keep up the HELOC. Did they leave the HELOC open or did they freeze new draws?

Thanks Jim,

Bill