Equity Line Reins are Tightened
Feb 25th, 2008 by The Cilks
If you are thinking of dipping into your home equity account any time soon, you may want to check with your lender first. Some of the bigger name lenders, including Countrywide Home Loans, Chase and Washington Mutual, have sent letters to homeowners across the nation freezing their existing home equity accounts. The lenders are positioning to protect themselves from further losses because of the subprime lending crisis, falling property values and deteriorating credit scores. As a result, a number of unsuspecting homeowners will no longer be able to draw on their home equity lines of credit. Some accounts have been frozen even if a substantial amount of equity remains in the property!
Gone are the days when lenders would allow mortgages and equity line values to equal 100% of the property value. Lenders are tightening the reins on their criteria, and one would be hard pressed to find any lender to extend credit past 80% of the home’s market value. For anyone planning to borrow against their home in the short term, this situation can prove to be more of a challenge than expected, as banks are reviewing the accounts of their home equity customers more frequently than in recent years.
For answers to your real estate questions, give Bob & Deb Cilk a call at (925) 417-7129. Pleasanton real estate agents with 40 years combined experience!
Keeping you up to speed on the pulse of real estate….
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