With the recent HELOC freezes, some borrowers have speculated that home equity loans are in decline. Surprisingly, this is not the case. Although it is currently more difficult to take out a HELOC, analysts seem to agree that these credit lines will continue to be a popular borrowing option.

Consider this expert discussion from a recent USA Today article:

“USA TODAY: Are home-equity loans fading as a popular source of cash because of declining home equity and stricter lending standards?

Baker: I’m sure that people will still get home-equity loans. They will continue to carry lower rates than credit cards. However, lenders will rightly be more cautious in the future.

Naroff: Just a cyclical down period. Equity will be rebuilt, and it is still the best source of cheap money, as it is generally tax deductible. And banks are becoming more aggressive again in this area when they see that values have stabilized.

Zandi: Home-equity lending is still very popular among prime homeowners with lots of equity, and there are still plenty of these folks. Indeed, with the recent decline in rates, home-equity lending is re-accelerating. It will never be as popular as in the housing boom, but it remains a very viable way to borrow for many homeowners.”

While lowering and freezing some lines, borrowers have continued to advertise for HELOCs on the web and elsewhere. Even Countrywide (the lender who sent out over 100,000 HELOC freeze notices) is paying for online advertising and is trying to sell home equity loans via their website.

See Also:

Are Lenders Still Offering HELOCs?

Which Lenders Are Sending HELOC Freeze Letters?

Tags | Heloc, heloc freeze