How to Cut Off Home Equity Lines

Stop a home equity line of credit.

A home equity line of credit is a revolving line of credit that is established based on the equity you have built up in your home. Since it is a revolving line of credit, as you pay it down, the line is available for you to use again, similar to a credit card. In order to cut off home equity lines, you have to pay off the outstanding balance and request that the lender close the line.

Instructions

1. Contact the lender that holds your home equity line of credit to request a payoff letter. Since you will owe the lender interest on any outstanding balance you have on the home equity line of credit, request a payoff letter from the lender and make sure that the letter contains the date to which the payoff amount is good. As long as you pay off the total by that date, you will not owe any additional interest to the lender.

2. Submit the payoff amount. Lenders typically accept payoffs in one of several ways, so find out what forms of payment your lender accepts. Choose the way you want to submit the payment to close the line. Payoff payments can usually be sent via regular mail or express mail (using a personal check, cashier's check or money order), online or by phone.

3. Request the line be closed by phoning your lender, then following up with a written letter. Paying off the balance does not automatically close the line; to cut off the line of credit, you need to specifically request that it be closed.

4. Call the lender to confirm their receipt of the payoff amount. You'll receive a letter in the mail from the lender that confirms that the home equity line is paid in full and that the lien for the home equity line of credit has been recorded as paid in the county public records.

5. Contact the county clerk's office where the home is located to confirm that the payoff of the home equity line has been recorded and the lien has been removed.

Tips & Warnings

• If you cannot afford to pay off the full balance in order to close the home equity line, then you will have to refinance your home mortgage in order to consolidate your first mortgage and the line of credit into one home mortgage.

• You can also refinance the home equity line of credit into a home equity loan, which is not a revolving line of credit, so you can pay off the balance by making principal and interest payments. This option allows you to keep your original mortgage and cut off the access to the home equity line while you pay off the home equity balance.

References

• FTC: Home Equity Credit Lines
• SunTrust: SunTrust Home Equity Line