Someone in my office just told me that she had a letter from her bank, saying that her line of credit would not be renewed.
Do you have a Home Equity Line of Credit (HELOC) on your house with an unused portion? For instance, if you have a HELOC for $100K but have a $40K balance you have $60K of unused funds available. Some lenders are putting a freeze on any "unused" portion of their HELOCs or reducing the credit limit. Several lenders have announced that they are putting a freeze on accounts for reasons such as payments more than 2 days late, inactivity, zero balance, and depreciating markets.
Gabe Bodner, a mortgage advisor I know, has been watching lenders over the last 8 months tighten their guidelines and increase their lending criteria to qualify for a HELOC. Some lenders are not even offering mortgages with less than 25% down. Others are no longer offering HELOCs or second mortgages at all.
So if you have a plan to use the "unused" funds on your HELOC, you might be wise to draw the funds now and deposit the money in a secure account so you can access the money when you really need it. Otherwise, you might find yourself in a position where you can't borrow all of the money in the future.
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