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If you have HELOC, and it get cancelled by bank
see
When a HELOC freezes over - Apr. 21, 2008
This is on April 2008. Don't know what the current situation is.
Expect you may get into very unconvient time, then suddenly, all you think can be your safe net get cut. Although the bank may get a new safe net, that does not mean they will give you one.
I think it is better to reduce debt, but keep reservation funds in hand.
Jya-Ning
see
When a HELOC freezes over - Apr. 21, 2008
...
Know your risk. Areas where housing prices have fallen by 10% or more are prime targets for freezes, says Susan McHan, president of Opes Advisors
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Lenders are beginning to apply the same standards (standard home loan) to existing HELOC customers. Call your bank and ask what the loan-to-value cap is on new HELOCs. If your house debt is above that, your line could be at risk. A change in credit score or a missed payment could also flag your account. Reread your contract to see if such factors allow the lender to cut you off.
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If your HELOC is on ice
Fight for a defrost. The letter from your lender should explain why the line was suspended and how to appeal. Some banks use automated processes to identify troubled markets.
To prove that your house hasn't been affected, ask a realtor to pull prices for houses sold within three miles in the past six months, ask your mortgage originator to intervene, or have your house reappraised. The latter can run $400, but if you were counting on the line, it may be worth it.
If a change in your risk profile is the cause, check your credit reports. Carr was told that her HELOC had been canceled because of a drop in her FICO score. But when she checked, it was above 800, so the lender reinstated her line.
Compromise. If your efforts fail, ask for a lower credit line instead of a total freeze. The bank may be more amenable if you hold your primary mortgage there, as that's an insurance policy of sorts.
Shop around. Not all banks have the same standards. If you have at least 10% equity, you may qualify with another lender. Search at bankrate.com, or click on the link above and to the right
Know your risk. Areas where housing prices have fallen by 10% or more are prime targets for freezes, says Susan McHan, president of Opes Advisors
...
Lenders are beginning to apply the same standards (standard home loan) to existing HELOC customers. Call your bank and ask what the loan-to-value cap is on new HELOCs. If your house debt is above that, your line could be at risk. A change in credit score or a missed payment could also flag your account. Reread your contract to see if such factors allow the lender to cut you off.
...
If your HELOC is on ice
Fight for a defrost. The letter from your lender should explain why the line was suspended and how to appeal. Some banks use automated processes to identify troubled markets.
To prove that your house hasn't been affected, ask a realtor to pull prices for houses sold within three miles in the past six months, ask your mortgage originator to intervene, or have your house reappraised. The latter can run $400, but if you were counting on the line, it may be worth it.
If a change in your risk profile is the cause, check your credit reports. Carr was told that her HELOC had been canceled because of a drop in her FICO score. But when she checked, it was above 800, so the lender reinstated her line.
Compromise. If your efforts fail, ask for a lower credit line instead of a total freeze. The bank may be more amenable if you hold your primary mortgage there, as that's an insurance policy of sorts.
Shop around. Not all banks have the same standards. If you have at least 10% equity, you may qualify with another lender. Search at bankrate.com, or click on the link above and to the right
Expect you may get into very unconvient time, then suddenly, all you think can be your safe net get cut. Although the bank may get a new safe net, that does not mean they will give you one.
I think it is better to reduce debt, but keep reservation funds in hand.
Jya-Ning
credit junkies. They are the US government and everyones state governments.
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