A little over a month ago I got a line of credit on a second home. Last week I put my 2 weeks in at my current employer and am planning to move into my second home. I was planning on taking some time off before finding a new job, 6 months or so. In this time I could fix and sell my current primary residence. I am now afraid the bank is going to call the line of credit. Can they and will they to that? The bank is a large nationally known one. My paycheck is currently deposited with the same bank each week, so i am thinking they will find out. What should I do??
Thanks in advance.
There is almost no way that one division of the bank will know anything about the other division and the bank would not, most likely, ever call a loan due because you quit your job. Just keep making your payments and focus on your employment situation and you should be peachy!
Thanks Darren. I live in a small area and word kinda get around. For the sake of argument, if the bank does find out, do they a have that ability? Would this be covered in the loan contract i signed?
Yes, the lender can call in your loan at any time for any reason. It is in your loan paperwork. However, that being said, I completely agree with D Eady's comment. Even though it is a small town and, "word gets around", the bank cannot make a judgment call on your ability to repay the line of credit simply because you quit your job. Just make sure you continue to make your payments on time (obviously).
Banks can also foreclose on people that fail to make payments, but you always hear of people living in their houses for years without making payments before the banks foreclose.
They can call it, but they will likely leave you alone as long as you are current.
Thanks guys. I like your rational. I too would be surprised that a bank would risk converting a paying customer into one facing a forced sale and possible foreclosure.
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!