Lowering Home Equity Loans

Video Transcript

"This is Patrick Munro, financial adviser, remarking on our home equity lines of credit being lowered. With the current sub-prime mortgage crisis and the credit crisis and foreclosure situation across the United States, home equity lines of credit are being challenged by financial institutions that are trying to make sure that their guidelines are being met in the falling property value arena. Home equity lines of credit are lines of credit that are based on rising home values and mortgage balances being paid off. And therefore, the middle equity is able to be harvested out of the home. When property values go down, as they are now nationwide, and foreclosures become an issue, banks have no choice but to lower the guidelines of their home equity lines of credit and make credit granting a tighter issue, going forward. And that's the situation that we find ourselves in the United States right now. This is Patrick Munro, financial adviser, talking about our home equity lines of credit being lowered."