May 4, 2020 – Wells Fargo announced last Thursday that it will no longer be accepting applications for home equity lines of credit (HELOCs) after April 30. The company joins another big bank, JPMorgan Chase, in taking this route “after carefully considering current market conditions and economic uncertainty due to COVID-19,” according to its website.
What Is a HELOC?
A home equity line of credit, or HELOC, is similar to a credit card, providing the borrower with a specific amount of money they can borrow and pay back, available to draw from as needed (this is different from a home equity loan, which they would receive as a lump sum). The line of credit allows homeowners to borrow money typically against 80% of the equity (the value of the home minus the amount still owed on the mortgage) they have in their property, meaning the home becomes