home equity account - suspended

[longbow]

Just got a disturbing letter from my bank yesterday.

We have an open equity account with about $60,000 we could access if we needed it. We opened it when purchased the home and it costs like $50 bucks a year to keep open.

Letter said the bank is closing all equity checking accounts that have not be utilized in the last two years. They also said, due to the home market value changes, I would have to get my home reappriasied to keep it open. Until that is done, my account is suspended. The appriasal is about $400 bucks in the letter

The only debt we have is a car payment of $280 per month and the mortgage.

Last month we paid off the balances on the remaining credit cards and now only use cash and a debit card.

Another thing with banks cutting future losses. Credit cards are next to be pulled back to reduce loss exposures.

We are just going to let them close the account. Its money that could tempt us into trouble.....

 

[Scutter01]

Having all your credit cards paid off actually reduces your credit rating, believe it or not. I'm not surprised that they want to suspend an unused revolving account, especially one with such a high available limit.

 

[Fletch]

I say let 'em close it, knock out that car loan as quick as you can, then whittle away at the mortgage. The faster I'm done with banks the happier I'll be.

 

[spasmo]

Having all your credit cards paid off actually reduces your credit rating, believe it or not. ...

With that being said, those 90 days same as cash options you choose can also reduce your credit rating. The problem is when you max out a credit card, it reduces your rating. With those 90 days same as cash ( a year or whatever the limit is) credit cards, the limit they give you is usually at or just a little above what the purchase is. Therefore you come close to maxing out your card hence you credit rating goes down. I didn't actually think about that until I read it in one of my money type magazines. It makes sense. I just never thought about it.

We have credit cards and we do have a balance on one of them but we do not use them unless it's an emergency. On our old house, we use to have a line of credit. We opened it to pay off cards and to have extra money if needed. At that point we started not using the credit cards anymore. We didn't use the line of credit either but we had it if we needed it.

 

[indyjoe]

With that being said, those 90 days same as cash options you choose can also reduce your credit rating. The problem is when you max out a credit card, it reduces your rating. With those 90 days same as cash ( a year or whatever the limit is) credit cards, the limit they give you is usually at or just a little above what the purchase is. Therefore you come close to maxing out your card hence you credit rating goes down. I didn't actually think about that until I read it in one of my money type magazines. It makes sense. I just never thought about it.

We have credit cards and we do have a balance on one of them but we do not use them unless it's an emergency. On our old house, we use to have a line of credit. We opened it to pay off cards and to have extra money if needed. At that point we started not using the credit cards anymore. We didn't use the line of credit either but we had it if we needed it.

Yeah, I got hit with that getting my mortgage. I took the 90 days card to finish off the payments on the rock I got Amy. I just sent the last check in when I was closing on the house and it hit my credit rating a touch.

 

[Warwagon]

Banks nation wide are closing heloc's and 2nd's if there's no balance. credit doesn't have much to do with it in 90% of the cases.

It

 

[longbow]

Brother who is now working at another bank, told me today 39% of his mortgages for that bank are 2 payments late or in forclosure.....

Most of his customers are on the east, west and gulf coast.

 

[singlestacksig]

Banks are trying to clean up their balance sheets. If you have a $60K HELOC with them it means they have to be ready to have $60K for you to use..
by closing inactive accounts they free up billions of room on the balance sheets...

Some people who do use the LOC have been told the total limit is now lower...

 

[baldmax]

If you use cash, why do you need a credit rating?

 

[singlestacksig]

car rentals, utility service, all sorts of things..

even purchasing a car they run your credit even if you are paying in full...

 

[baldmax]

car rentals, utility service, all sorts of things..

even purchasing a car they run your credit even if you are paying in full...

You can rent a car using a debit card, I do it all the time. My point is, that if you don't have debit, your cash flow groes.

 

[Big12Inch]

Change Banks

Change Banks....Seriously I was in 5/3 Thursday talking to "my guy" and they were throwing home equity lines at me for around Prime minus 1%...

 

[Mike F]

Longbow,

The OTS recently reminded the industry that arbitrarily closing a line of credit due to a generic reduced value reason is a form of redlining, and is illegal. They must document that your specific property has declined in value. If you want to go through the hassle you likely can have an interesting conversation with your loan officer.

Office of Thrift Supervision - Press Releases

 

[singlestacksig]

You can rent a car using a debit card, I do it all the time. My point is, that if you don't have debit, your cash flow groes.

a bad credit RATING can effect you, if you have a bad enough rating you might not be able to get a debit card account..

and if you were somehow able to pay for everything with cash, you might not get a good rating.. and you might have to pay more for the same service as someone with a good rating.

 

[SavageEagle]

I've got some BAD ratings and I've never had trouble renting a car, or getting a debit account. What kills me is that jobs will turn you down for having low credit, even the Army won't take you if you are too far in debt. It's like, duh, I'm getting a job to pay my debt but you won't give me a job so my debt grows... catch 22 anyone?

 

[Shay]

I've got some BAD ratings and I've never had trouble renting a car, or getting a debit account. What kills me is that jobs will turn you down for having low credit, even the Army won't take you if you are too far in debt. It's like, duh, I'm getting a job to pay my debt but you won't give me a job so my debt grows... catch 22 anyone?

From your own perspective, you are trustworthy.

From the potential employer's perspective, you have made bad choices with your own money.

It's their risk if they hire you and no business will survive by making poor choices of their own. If two qualified candidates apply for a position and one has a low credit score, I would absolutely hire the other one.

 

[Fenway]

What do you mean bad ratings? What is your credit score and how did you get into this mess? Have you talked to anyone that might be able to help you get out?

I've got some BAD ratings and I've never had trouble renting a car, or getting a debit account. What kills me is that jobs will turn you down for having low credit, even the Army won't take you if you are too far in debt. It's like, duh, I'm getting a job to pay my debt but you won't give me a job so my debt grows... catch 22 anyone?

 

[singlestacksig]

I've got some BAD ratings and I've never had trouble renting a car, or getting a debit account. What kills me is that jobs will turn you down for having low credit, even the Army won't take you if you are too far in debt. It's like, duh, I'm getting a job to pay my debt but you won't give me a job so my debt grows... catch 22 anyone?

I would bet your score is not as bad as others I have know..
( some people can not even have a checking account)
Plus you are probably paying more to rent cars & have insurance than someone with a better score..

 

[SavageEagle]

Shay I understand that point of view but if those choices were made years ago and someone is trying their damnedest to get it corrected, how can that person repay 50k in debt without a good job? It's bad buisness in my eyes. Just because someone made bad choices with their money doesn't mean they are a risk to hire. I just don't get it I guess.

Fenway, my ratings are bottom of the barrel. I'm not sure of the score's exact number but I know 300 something is poor. I have a defaulted car loan, student loan, 10k cc that was my mom's but she gave me my own card thereby making it my debt too, many smaller debts with hospitals and a sprint bill that was jacked up because they're greedy. How you get 800 from 300 is beyond me.

I talked to a couple people including my own bank trying to consolidate all my debt. I got LAUGHED at and one guy said to go with bankruptcy. My mom just went through that and was granted chapter 7, Thank God. I'm not sure if I can do that or 13 but either way I'm screwed. Like I said previously, I can't even get a job...

 

[singlestacksig]

Shay I understand that point of view but if those choices were made years ago and someone is trying their damnedest to get it corrected, how can that person repay 50k in debt without a good job?...

..

I talked to a couple people including my own bank trying to consolidate all my debt. I got LAUGHED at and one guy said to go with bankruptcy. My mom just went through that and was granted chapter 7, Thank God. I'm not sure if I can do that or 13 but either way I'm screwed. Like I said previously, I can't even get a job...

Really, if you are 50K under and don't have assets to off set that, Bankruptcy is a good idea..