Super Borrowers Can You Still Use the Equity in Your Chicago New Home?

August 06, 2010

home equityIf you have just purchased a new home in this environment of stricter lending regulations, you may just have your own super power. Rather than subprime loans of late, lenders are now extending certain loans only to “super-prime” consumers, according to a recent article in the

Equifax Personal Finance blog.

The tighter standards are not just for home loans, but also for home equity lines of credit, auto loans and even bank cards. Not only are fewer loans are being made, typically only to low-risk borrowers, but they also are generally smaller than loans made pre-recession.

In her article, “

Credit Trends: Super-Prime Consumers Tap Home Equity Lines of Credit and Credit Cards Not Available To Most,”  expert Janet Dedrick continues an earlier discussion of credit trends. She says the conservative actions of lenders are to be expected in response to recent difficulties. We’ll really know things are turning, she suggests, when standards start to loosen again.

In the interim, it’s not just lenders who are being conservative. Fewer home equity lines of credit are being accessed, and Dedrick believes this is partially due to more conservative practices by homeowners themselves. In the days of the housing bubble, homeowners would take out home equity lines of credit for non-traditional purposes. Rather than remodeling, renovating or otherwise adding value to their homes with the loans, people were using the funds to invest in business ventures, flip houses, pay credit card bills, go on vacation or any number of other non-housing  related activities. Now, as consumers cut back, fewer people “need” the equity in their homes.

Here are two examples of the change in the credit environment. In April 2006, YTD new home equity lines opened were valued at $115 billion. During the same time frame this year, only $22 billion in home equity credit had been extended. New credit cards opened fell from $95 billion YTD in April 2006 to just $36 billion in the same period this year.

To tap into the wisdom of Dedrick and other experts who are monitoring signs of economic change and offering practical solutions for homeowners, visit the

Equifax Personal Finance Blog.


About The Author

Read All Stories By Carol Morgan

Carol Flammer is a public relations and social media marketing expert, strategist and consultant. With 20 years of experience, Carol has established herself as the “go to” for real estate and construction products public relations and social media. Carol is president of Flammer Relations, Inc., and managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Atlanta and Chicago.

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