If you’ve been thinking about doing some remodeling and using your home equity line of credit to do so, or even if you just count on having that money available for an emergency (job loss, injury etc.) - DON’T…

Quite a few banks, including Bank Of America, Citibank and Countrywide Financial have started to either reduce or completely freeze home equity lines of credit due to the declining values of homes. I’m sure more banks will follow suit.

What can you do….

• If you’ve been thinking about using your Home Equity Credit to make home improvements, make sure all the money is still at your disposal before you start signing contracts or buying materials.
• If you rely on being able to quickly tap into this money in case of an emergency, readjust your strategy and beef up your savings account or get some information on how long it would take to cash into some long term investments. Unfortunately job loss has become a lot more common in today’s economy, so make sure you have a financial cushion to fall back on other than your home equity.
• If your home equity line of credit has been adjusted by the bank or has been frozen, you may have a chance to appeal this decision, if you can prove that your home has not declined in value. This is usually done through an appraisal which you unfortunately have to pay for yourself regardless of the outcome of the bank’s decision regarding your home equity line of credit.