There used to be a time every bank and mortgage company in Greenville, Spartanburg, Anderson, and the surrounding Upstate South Carolina areas were offering numerous options for home equity loans. Many options were even offered at or near 100% of the home’s appraised value. That is not the case anymore.
Many banks and lenders have cut the Loan-to-Value (a mortgage term of the percentage amount of mortgage loan in proportion to a home’s appraised value) from 90% and 100% down to 80% or even lower. Some banks and lenders have cut home equity loan products altogether.
Why? The housing market struggles, consumer delinquency, and foreclosures have made many of these loans unprofitable and too risky for many lenders. Many lenders have even gone as far as closing out or cutting the limits on EXISTING lines of credits, deeming them too risky without updated appraised value in a market of declining house values. What should a consumer do???
The key for any consumer looking for a home equity line or loan in South Carolina is to shop around. There are still a few good outlets for home equity lines. For example, Horizon Financial, Inc. still has a partnership with international bank RBC Centura which allows up to 90% combined Loan-to-Value on equity lines and they have done very little equity line adjustments on current customers.
The liquidity safety net of having an equity line can be very important in uncertain economic times. I highly recommend any consumer who doesn’t have at least 12 months cash reserves for all their monthly bills to get an equity line, just in case. Take a look at your current financial situation and make sure you are in the safest place possible.
If you have any questions related to this article or other articles or any mortgage questions contact Gary Schoenholz 864-979-1111. www.GaryTheMortgageExpert.com
