Fewer Banks Will Offer a Home Equity Line of Credit

Source: https://www.floridarealtors.org/news-media/news-articles/2020/05/fewer-banks-will-offer-home-equity-line-credit

NEW YORK – Homebuyers planning to get a home equity line of credit (HELOC) after closing may have to reconsider their options.

Financial institutions have been tightening lending in recent weeks due to the COVID-19 pandemic, and home equity lines of credit (HELOCs) have become their latest target. JPMorgan Chase and Wells Fargo are the latest bank giants to announce that they’ll no longer accept applications for new HELOCs.

“The decision to temporarily suspend the origination of new HELOCs reflects careful consideration of current market conditions and uncertainty around the timing and scope of the anticipated economic recovery,” Wells Fargo spokesperson Tom Goyda said in a statement.

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Wells Fargo follows on the heels of Chase in announcing a temporary halt to HELOCs due to “economic uncertainty.”

JPMorgan Chase, the nation’s largest lender by assets, also announced last month that it was raising its lending standards for homebuyers who apply for a mortgage, requiring nearly all borrowers to have at least 20% down and a 700 FICO score.

Source: “Wells Fargo Joins Chase in Halting HELOCS,” HousingWire (May 1, 2020)

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