Concerned About the Mortgage Market? Consider a Home Equity Line of CreditBy Richard Barrington
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People with solid credit histories and significant home equity should be the last to be affected by recent trends in the housing and mortgage markets. Even so, if you are concerned about the availability of home equity loans in the future, you can remove some uncertainty by securing a home equity line of credit.
Access to Home EquityHome equity may be the largest single asset of most homeowners, but it is an unusual sort of asset. Short of selling your house and cashing in the proceeds, access to the value of your home equity depends on your ability to borrow against it.
If you were considering a home equity loan sometime in the future, this means accepting some uncertainty about the availability of home equity loans if current trends worsen. For example, under extreme circumstances, tighter lending standards could make a home equity loan difficult to come by, while a sustained slump in housing prices could reduce the amount of home equity you have available.
Securing a Home Equity Line of CreditWhile neither of the above is a likely scenario, you can hedge against these risks by securing a home equity line of credit. Mortgage companies offer a home equity line of credit as a way of getting up-front approval for credit, with the ability to wait and use that credit when necessary.
If you are concerned about current mortgage and housing trends, you might check into a home equity line of credit as a way of taking some uncertainty out of the availability of credit.
Many mortgage companies offer these lines of credit. As with any such loan, you should compare mortgage companies to see which offers the best terms. Make your best deal, and then the credit will be there for you when you need it.
About the Author
Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive.
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