Line of Credit Q & A


My lender reports my line of credit under my revolving credit even though it is secured by my home. Is this correct? Additionally, they have suspended my account due to my property value decrease. Can they still classify it as a revolving line of credit if I cannot access the funds? Is there anything I can do to get this changed? Thanks!


A line of credit is a revolving account so categorizing it as such is accurate.  Regarding their decision to suspend your line of credit, you’re not alone.  Many consumers have seen their equity lines either suspended or reduced because of the drop in property values.  The reason they’ve done this is because the pricing of that kind of line of credit is determined, in part, on the fact that your home has equity securing the line.  If that’s not the case any longer then the lender is at risk.
If you believe your home’s value fully secured the line of credit you can plead your case with the lender and even order your own independent appraisal as support.


John Ulzheimer

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