Just a friendly reminder: your bank may freeze your HELOC. We've covered the trend but it bears repeating because you can find out at the worst possible time. Make sure you know what's happening with your loan. Is it frozen or has the credit limit been changed?
In addition to seeing your available cash evaporate, you can see your credit score suffer when a HELOC is frozen.
If you find yourself with a frozen HELOC, you can plead your case with your bank. Go in prepared with an argument as to why you are not a bad risk. You'll want to show that you have sufficient equity, debt to income ratios, and credit history. The Wall Street Journal's Your Money Matters Podcast recently discussed the option to appeal, and you can listen to the story for more details (MP3 File).
Further reading:
Question:
I had a Heloc….sold the house….funds paid both mortgage and heloc…bank never closed heloc and I stll have access to the funds…am I still responsible for any usage of funds?
Thanks
Canada.
Yes, you’re still responsible for the use of those funds (assuming you’d be able to use the funds — any checks you write might just bounce when the bank discovers the error).
I’d suggest contacting the bank to get the credit lines cleaned up.