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Home equity loans still tough to find

June 15, 2010 by  
Filed under Articles and Features

bankrate_170x33Bankrate.com:┬áToday’s homeowners are finding it far more difficult to obtain a home equity loan or line of credit.

Lenders scrambling to cover losses are tightening standards and taking a close look at housing values. Fewer homeowners now qualify for home equity products, and experts say uncertainty in the housing market is only exacerbating the problem.

“People were used to thinking they could easily get $50,000 in credit,” says Cameron Findlay, chief economist for LendingTree.com. “That’s just not the case anymore.”

However, what might seem like a horrific nose dive in home equity lending is merely a return to more normal times, Findlay says. During the height of the housing boom in 2006, banks were extending loans of up to 100 percent — and sometimes even more — of a home’s value.

Homeowners were using HELOCs to take vacations and buy boats. More recently, falling real estate values have evaporated what little equity some homeowners have.

According to research firm First American CoreLogic, more than 23 percent of homeowners are “underwater” in their mortgages with negative equity in their homes.

READ THE FULL ARTICLE AT BANKRATE.COM

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