Some financial experts advise clients to take out a HELOC as a security against potential job loss. But, this strategy only works if the homeowner is currently employed when the equity loan closes.

WalletPop reports:

“That’s a possible step to take before you lose your job, but not after you’ve lost it. Why? You most likely won’t qualify if you don’t have a job, especially during these times when skittish lenders often aren’t lending to people who are still employed. And even if you do qualify, expect to be charged a whopping interest rate. Many financial experts say a HELOC is the last of the last resorts.”

Unfortunately, it’s often difficult to predict layoffs. However, many applicants are able to take out a home equity line of credit with few closing costs and let the line sit unused until trouble arises.

See Also:

Is a HELOC Right for Me?

Tags | Heloc, home equity line of credit, mortgage crisis