What is a Home Equity Line of Credit (HELOC)?

A HELOC is an open-end line of credit that is secured by a consumer's primary residence. There may be different ways to access the funds from a HELOC, including by writing checks against the line of credit or transferring […]

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The bank increased the rate on my variable rate home equity line of credit (HELOC) without providing any notice. Can it do this?

The term "variable" means that the interest rate on your HELOC is tied to an index or formula that changes periodically. When you contracted for the HELOC, the bank was required to provide you with a disclosure that […]

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The bank froze my home equity line of credit (HELOC) because it claimed that there was a significant decline in value. I agree that the value of my home has declined, but I do not think that it was a significant decline. Does the law define what constitutes a significant decline?

Under federal law, what constitutes a significant decline will vary according to individual circumstances. Generally, if the value of the home declines so that the initial difference between the credit limit and the […]

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The bank reduced my home equity line of credit (HELOC) before they contacted me. Does the law require them to notify me before they reduce the credit line?

No, the bank is not required to give you advance notice. If the bank is permitted to reduce or freeze a HELOC (which in specified circumstances it may do), then it must provide the following: The bank must provide you […]

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I just received a letter from my bank advising me that they have frozen or reduced the amount of my home equity line of credit (HELOC). The letter explained that the action was taken because the value of my home had declined. Is that legal?

Yes, under specific circumstances. Federal law permits the bank to reduce the credit limit on your HELOC in certain circumstances. If the bank determines, consistent with regulatory standards, that there has been a […]

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My Home Equity Line of Credit (HELOC) was reduced or frozen. What can I do to have the credit line reinstated?

Federal law provides two options. The lender can require that you request reinstatement of your original credit line when the circumstances permitting the reduction or freeze no longer exist. In this case, the lender […]

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The bank told me that I could no longer get advances from my home equity line of credit (HELOC) because the value of my home declined. The notice I received from the bank stated that I could appeal the decision by obtaining an updated appraisal. The bank indicated that I would have to pay for that appraisal. Can the bank require me to pay for the appraisal?

Yes. If you appeal the bank's decision to reduce the credit limit or suspend your ability to draw on your HELOC, then the bank can require you to pay reasonable fees for a home appraisal or credit report fee. Be aware that […]

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The bank just reduced my home equity line of credit (HELOC) so that it is equal to the amount I have already borrowed. I am worried that if they reduce the limit any further that it may raise my payment. Is this possible?

No. Federal law prohibits the bank from decreasing your HELOC to an amount below your current balance if it would raise your required payment.

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What is a home equity loan?

A home equity loan allows you to tap into your home's equity, which is the difference between the amount your home is worth and the amount that you still owe. Homeowners often use a home equity loan for home improvements, […]

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I made a payment, but it has not shown up on my credit card / home equity line of credit / personal lines of credit statement. What can I do?

You can contact your bank, which may require you to file a written billing error notice. Send the notice to the address specified after "Send Billing Inquiries to:" or the address specified on your monthly billing statement. […]

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I paid off my mortgage / home equity / consumer loan and the bank charged me a high prepayment penalty. I wasn't aware that the loan had a prepayment penalty. What can I do?

Review your loan agreement, which is the contract between you and the bank, to determine if it specifies the circumstances that could result in a prepayment penalty. You may also contact the bank and ask about the […]

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How can I get a refund for a credit balance on my credit card / personal line of credit / home equity line of credit account? How soon will I get it?

It depends on how you’d like to receive the refund. If your credit card account/line of credit has a credit balance—in other words, money is owed to you—of more than $1.00, you have two choices: Roll the balance over to […]

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