We’ve previously reported that HELOC lenders are freezing lines due to declining home values and non-use. However, your HELOC may be in danger even if these concerns do not affect you.

Kiplinger recently published an article detailing possible triggers that may cause lenders to freeze HELOC lines:

“Declining local home prices may prompt your lender to padlock your home-equity line. But Gumbinger says lenders are also looking for other clues to risk: You were a borrower with poor credit quality to start with; the line of credit was part of piggyback financing to buy your home with little or no down payment and no private mortgage insurance; your credit report reveals financial trouble, such as late payments on a credit card or auto loan; or you took the HELOC through a third party, such as a mortgage broker or finance company, and not the lender that now owns the loan — an arrangement that has produced a major portion of troubled loans.”

These triggers are not guarantees that your line will be frozen. However, they may cause your lender to take a second look at your account.

See Also:

Lenders Freezing HELOC Lines

What to Do if Your HELOC is Frozen 

Tags | Heloc, heloc freeze