Is your Home Equity Line of Credit in risk of being frozen or reduced?

Real Estate Agent with JH Realty Partners 6501309180

An article by Money magazine was published just recently about this.  If you have a line of credit on your home waiting to use this summer for renovations, landscaping or your summer vacation, you may want to read this article and you may want to access it now.  You used to be able to get a HELOC for 100 percent of the value of your home.  However with the market going soft and some markets declining, the bank may put a freeze or reduce the amount of your HELOC.

However a word of caution, my advise in not to borrow up to 100 percent if you still can.  Is this not one of the ways we got into this current market situation? I think I would play it safe and only borrow up to 80 percent of my home's value.  Leave the 20 percent for good measure.

They are taking your credit score and missed and late payments into consideration as well.  If your FICO score ahs gone down this may red flag your account. or freeze your account. 

Not all banks are freezing their HELOC, but they are being stricter with the guide lines, and as history has proven, once the big lenders start the others will be sure to follow!

I do not know why I did not see this coming, as it only makes sense this was the next step.  Probably a good one, it will keep people out of trouble in the future. 

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Michelle Gordon is a Realtor with JH Realty Partners - Ada, Michigan -  With a team of Realtors who's Focus is 1st time home buyers, Relocation, Luxury listings and Commercial Properties in West Michigan.  You may find Michelle on facebook, twitter or linked in and she invites you to join her.


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