It has been well-documented that many lenders have cancelled or reduced home equity lines of credit due to value depreciation and their fear of risk. Many of us use home equity lines or loans to finance the improvements we make to our homes.
Sure, there are other options than using home equity to pay for your improvements. You can use your savings or an unsecured line of credit, including your credit card. But in these times, few of us want to part with savings and no one wants to take on any high-rate unsecured debt (especially when it gives us no tax benefit). The National Association of Home Builders has an interseting article on this topic from the builder's perspective.
Have your plans been affected by an unexpected change to your credit line? Or did you have a difficult time trying to get a loan approved? I'd like to know how you got around the problem.
Tuesday, December 23, 2008
Has the Tight Credit Market Affected Your Plans?
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1 comments:
It hasn't affected me that much because I'm pretty much done here. The bank also hasn't reduced my HE line of credit, probably because I've been paying it off religiously for the past three years without a late payment.
But it's messed up Karen. She had a $150k line of credit which she intended to use to rebuild the front of her house, build a garage, etc. She was late with a couple of credit card payments and her bank reduced her credit line to $50k, then $25k.
The irony is that she's got a stable, guaranteed income 40% higher than mine.
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