If you have a HELOC from Wells Fargo, be on the look out for a “plain looking” envelope in the mail that alerts you to an interest rate adjustment to over 10%. According to borrower reports, some homeowners are receiving these increases without missing any payments or otherwise violating the terms of the home equity line of credit.

Mr. Mortgage reports:

“The rub here is that Wells ALREADY switched the terms to the 10.13% and the only way out is to ‘decline’ the offer by March 15th. It is very confusing. Of the hundreds of thousands of these that Wells may have sent out, how many will go unattended to? My guess is a large percentage. In the next statement that comes, these borrowers will see a payment increase of 150%! Think that may lead to some HELOC loan defaults? This is radical. This does not lead to warm and fuzzy feeling for the bank.”

Unfortunately, this is likely to come as a huge shock to a lot of faithful borrowers. It sounds like this notice is easy to mistake as a credit card offer or other junk mail item, when it is actually going to have a big impact on the recipient.

For most, HELOC rates are extremely low right now. But, like everything else during the past 12 months, this proves that nothing is guaranteed.

photo credit: RomanKetchup

See Also:

How to Negotiate the Best HELOC Rates

10 Most Important Questions to Ask Your HELOC Lender

Tags | Heloc, home equity line of credit, interest rates, Wells Fargo