Home Equity Line of Credit Suspension

[honeylady]

I have a $50,000 HELOC with Washington Mutual with a $25,000 balance. I was notified last week that it was suspended. I just called the bank to say that I would be paying off the HELOC and paying down my mortgage by $150,000.00 - leaving a balance of $60,000.00 (my mom just passed and I inherited some money). I was then told that I would still have to have an appraisal of $300,000 to get a line of credit. That's nuts. How do they expect to ever improve this economy if the banks won't lend any money. I have a credit score of 805. This has nothing to do with my credit worthiness. Anybody else going through this?

[originalpckelly]

1. Why would you want to get yourself in that kind of debt after just paying it off?

If you can live without doing it, then live with out it.

[pnwmom]

2. Rather than paying down your mortgage by $150 K, then keeping a credit line,

why not pay your mortgage down by $100K, and put the $50,000 into a bank account that is your own credit line to yourself?

You could even pay yourself interest

;)

instead of the bank.


P.S. Make sure any extra payment you give to the bank now gets credited to PRINCIPAL, not to interest.

[SOS]

3. Question

What does it mean that the $25,000 heloc balance was suspended?
Did you take $25K with another $25K "available" or did you take the full $50K and paid down $25K?

Curious because we have a heloc with Wash. Mutual and want to know what to watch for next.