We have outstanding credit and took out a Home Equity line of credit a few years but never used it. Citibank just lowered it from a few hundred thousand to 10,000 because they say all homes have gone down in value. We still have 200,000 in positive equity in our house so I am sure that Citibank is just trying to do a blanket lowering of all lending like alot of banks these days, either do to their TARP obligations or making more profit elsewhere. Any knowledgable folks out there that can recommend a new bank that is fair is their Home Eq lines of credit. I would like to do business with a different bank on my 1st mortgage as I can save 1% over my rate now and get the line of credit at the same bank. Recommendations, please.
Many banks are lowering or freezing home equity lines of credit right now because of all the foreclosures. When a home is foreclosed, the holder of a second lien (second mortgage or home equity line of credit) rarely collect anything when the home is sold.
My recommendation is to find a credit union and apply for a home equity line of credit with them. Typically, their interest rates are much lower and, often, they charge few or no closing costs. Their service is very good, too. Credit unions are now open to more people, where in the past, membership was usually restricted to the employees of a single company. And, credit unions are not-for-profit, meaning they don’t have any shareholders (investors) to pay. The members of the credit union are the owners.