Renovators Caught in HELOC Freeze

This past January, banks and lending institutions started sending “Dear John” letters of sorts, telling borrowers their HELOC was being cancelled or frozen. And, just like that, the spigot of money was switched to the “off” position.

But, what if you were in the middle of a kitchen remodel, your house is torn apart and your cash flow to pay the contractor suddenly goes dry? This Wall Street Journal article, “Renovators in Limbo,” provides just that scenario for several families. Some people have other sources to draw from, but others need to save money the old-fashioned way — bit-by-bit — to finish the project.

The WSJ article provides some information on what to do if your credit line is frozen, or might be soon:

• Look locally for funding
• Look at resources that provide a broad range of loan sources, such as Zillow Mortgage Marketplace
• Pay for full appraisals
• Be proactive: Pull money from your HELOC before it freezes and stash it in an interest-bearing account until needed
• Scale back your project or postpone it

Seriously, if you are looking for a HELOC, home equity loan or a mortgage, Zillow Mortgage Marketplace offers an innovative approach to borrowing. You, the borrower, can fill out a mortgage loan request form anonymously — no name, address, phone number or Social Security number is required — and you will get mortgage loan quotes returned to your private Zillow account. No one knows who you are. No one will call or e-mail you to pressure you. You are in control. It’s really a pretty cool approach to borrowing. Here’s more about how it works for borrowers.  Try it out– especially if you can’t stand looking at the sink sitting in the bedroom another day.