Friday, April 4, 2008

Your Home Equity Line Might Vanish

Last month we received a memo suggesting we inform our clients that many lenders were poised to freeze their HELOCS. So in our monthly newsletter we let everyone know that if they know they’ll need the money from their Home Equity Lines they might want to take it out now and put it into an interest-bearing account. But before we could even get the newsletters in the mail, I received a letter from my bank. My HELOC has not been frozen, but the maximum line has been decreased based on the bank’s belief that houses have decreased in value, generally speaking. So now I know firsthand – it’s happening. The bank told me I could pay for an appraisal to be done by THEIR appraiser if I wanted to dispute it, but I know that will likely prove to be wasted effort, time and money.

I’m not overly alarmed by it. According to Freddie Mac’s chief economist’s report the housing market probably won’t improve as a whole until 2010. In our favor, we are still experiencing job growth in Oregon at this point which offers hope in terms of recovery. But it’s a good time to create a short term budget if you were planning to leverage the equity in your home over the next few years. Here’s a very thorough and easy to navigate budget created by Dave Ramsey if you need help there.

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Search Engine Marketing said...

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If there is a substantial difference between what you budgeted and what you spent, then you’ll need to readjust the budget to make up for the difference. If one category
continually comes up over or short for two or three months, then you need to adjust the budgeted
amount accordingly.

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