What's Up With HELOCS?

Clients, friends, and agents in my office have all told me stories about home equity lines of credit that have been canceled or had their terms changed.
These home equity lines of credit (HELOCS) have been a popular financial tool for homeowners precisely for times like now...a monetary cushion in case of job loss or other unforeseen fiscal glitch.
These lines of credit replaced savings accounts as the fallback, with many financial advisers telling homeowners to keep a $50,000 line open at all times.
But that fallback is evaporating. Lenders in the past year have made it much more difficult to qualify for home equity lines of credit, and even those who do get them will pay much higher interest — higher than the average long-term mortgage.
Around the middle of last year, many banks began canceling unused portions of homeowners’ lines of credit, and banks more closely scrutinize the combined debt-to-income ratio, looking further into the borrower’s past credit card bills to determine whether he or she tends to spend freely. Fewer banks are offering HELOCS, so there is less competition. A 30-year fixed-rate mortgage has more profit potential for the lender.
If you borrowed against your equityline, be grateful, an if the bank hasn't cut your HELOC by now, you are probably safe.
Those homeowners who borrowed against their equity credit lines during the boom, meanwhile, should be thankful for the sub-3 percent rates they now enjoy.
And if your bank hasn't cut your HELOC by now, you're probably safe.