[jIMOh]

Quote:

Originally Posted by growing_older Over in the mortgage threads, there is much discussion of lenders restricting credit, even for prime borrowers. One of my FIRE plans has been to invest in tax advantaged accounts and pay off my mortgage and at the same time keep a HELOC for a possible source of emergency funds should it ever be needed. Is this still a viable plan, if the bank may unilaterally change the agreement? By keeping a relatively small emergency fund in cash, I feel like I am putting my money to work elsewhere, yet still have the HELOC to fall back on should a big emergency arise. What I am reading now seems to say this is riskier than I thought if the bank might refuse to extend funds as they previously agreed. If this is real problem, then perhaps I should divert any money now paying off the mortgage into a larger cash emergency fund, in which case maybe the HELOC isn't needed at all. I am reluctant to devote new cash to this, when it seems the HELOC really should be doing this job, but can I really count on the HELOC. I never heard of banks refusing to extend credit under an agreement they had already made, but people do seem to be reporting that happening. I can see it would be safer to accumute the savings. But what are the chances I really need that much safety? Is it becoming common for banks to withhold HELOC?

Here's a discussion on another board on this very subject.

misc.invest.financial-plan | Google Groups#