HELOC's - Banks Continue to Tighten Up Even on Existing Mortgages
As we all know banks have been tightening up their guidelines for lending to home buyer's. I have heard from some clients and others about banks tightening up on existing loans especially HELOC's. A HELOC is a home equity line of credit for those of you that are unfamiliar with the term. It is a loan that individuals take out against the equity in their home to make home improvements, consolidate debt, pay for college, etc. Some people were basically using their homes as ATM's which is unfortunate because now they are upside down. The point I am getting to is that banks are starting to evaluate their customers with HELOC's and the decrease in value of their homes. A lot of homeowner's have HELOC's with low balances that they have had since the real estate market was in the boom phase. I have heard that they are taking away these line of credits or reducing the limit based upon the decline in the value of your home and mortgage loan balance. Even if you pay your payments on time, have great credit, and low debt they are still reducing borrowers credit limits. If you have an existing HELOC and are planning to use the money for an upcoming project you may want to confirm that the money is still available for your use. It would be very inconvenient for you to start a major home remodeling project and then be cut off half way through. Another jam you could get into is if you were planning on using the money as a downpayment on another property and the limit is decreased between contract and closing and you have to have the money to close. I wanted to bring this to everyone's attention because I know that it has come as a shock to individuals who have high credit scores, low debt, and make their payments on time. If this scenario has happened to you don't take it personally it is happening to many credit worthy homeowners.
About Kim:
Kim Darwaza is a rare Northern Virginia native that has area knowledge that sets her apart from other agents. Coupled with her desire to be a REALTOR® since high school it allows her to provide superior customer service to all of her clients. She is a graduate of Fairfax County Public Schools and attended Terra Centre Elementary School, Washington Irving Intermediate, and Robinson Secondary School. After high school she attended Virginia Tech and earned a B.S. in Finance from the Pamplin College of Business. After graduating from Virginia Tech she was a "Big Five" Management Consultant. This business background laid the foundation for running her own business, developing her marketing plan and strong work ethic which has helped her to successfully serve her clients needs. She has dreamed of being a REALTOR® since High School and is thrilled to be living her dream. Kim believes that true passion breads success and this has lead to her success as a REALTOR®, her ability to offer superior customer service, and continuous drive to learn cutting edge industry knowledge. Contact Kim today for all of your Northern Virginia Real Estate needs. kim@kimdarwaza.com