Can HELOC Lender ask for Full Payment Whenever?

Question

Ok to keep it short i have 4 HELOCS on 4 different properties fully paid off and was thinking about getting another HELOC But it just Occurred to me can my Lender ask for the FULL amount whenever they please before the 30 year contract i have with them? As in the company is going out of business or the company is doing poorly can they demand full payment?? if so i really dont like this idea and may not barrow again as i will loose everything because i would not have the FULL amount to pay off 4 Properties

Ken M. · Answer

.You really should read the documents you signed. If you don't understand them, have someone who does, go over then with you.Generally, and this can vary by company, they set up an amount they will allow you to borrow, say $50,000. You use it like a credit card. You use your card or write a check for varying amounts, say $20,000 . You can pay it down this month and use it again next month.You are charged interest only on the amount you borrow for the time you owe it until you pay it off.What they will do, if the economy changes, or if your situation changes, they will immediately reduce the limit to the amount you have outstanding at that moment and will not let you borrow the full amount. So, a $50,000 limit becomes a $20,000 limit if you have borrowed $20,000. As you pay down the amount, they will reduce the limit further.That means they can't really simply decide to make you repay all of it because they changed their minds, but they can reduce the cap on the amount you can borrow. That also means that if you have a HELOC with a $50,000 limit but you haven't borrowed anything, and a great deal comes along that you want to use the $50,000 on, if the market has shifted, they will not allow you to borrow the money they told you that you have access to.

A lot of people were surprised to have their HELOCs "turned off" when they needed it the most to get through the last downturn in the economy. Lending dried up and HELOCS were worthless.