the wasserblawg

Never mind that the lender might send a letter telling you that the size of your line of credit is going to be lowered, if you are even remotely considering a sale of your home and purchase of another, NOW might be the time that WANT/NEED to get that HELOC anyway. With a slow market, there is just no guaranty that you are going to be able to sell your home in time to buy the next one. You might be able to offer to buy the next house contingent on the sale of yours, but there is no guaranty that the seller will agree, or that you will find a buyer who can fulfill the contract to buy yours. Mortgage markets are tightening for everyone. You may need to tap into that built-up equity in your current home before you sell it, in order to buy the new one. THE PROBLEM: Most mortgage lenders will not want to remortgage your house for you once you have listing on the MLS. As suggested by Dan Green at Mobium Mortgage , "If there's even a remote chance that you'll need your home...

A new warning to anyone who has mortgaged property with a Home Equity Line of Credit. Borrowers with Home Equity Lines of Credit (HELOC) loan on their property pay interest to their lender based on the average daily loan balance outstanding at an interest rate that varies from month to month, typically tied in some fashion to prime lending rates. Typically, all that is required in the way of minimum payment is the interest only. As interest rates rise, so do the monthly interest payments. We are all sensitive to the effects of interest rate changes on our monthly payments as we get billing statements every month and can see the changes every four weeks. With property values declining in many locations nationwide (including some parts of Chicagland), a stealthier, and perhaps scarier problem is looming: STANDARD HELOC loan agreements allow lenders to DECREASE the lines of credit available to homeowners if the value of the property declines. Borrowers do not get a say in the lender'...