Monthly Archives: June 2020

Jun, 10, 2020 Topic: Home Equity

HELOCs Constrained During Covid 19

As states across the country enacted social distancing to stem the devastating impact of Covid 19, unemployment rose to heights not seen since the Great Depression.  A byproduct of nearly 40 million lost jobs was the reaction by banks.

Rates have been dropped dramatically, making the cost of credit extremely low.  This is fantastic for businesses but not great for consumers.  Because banks, seeing the jobless rate balloon, are concerned about the ability of individual borrowers to repay loans.  So, banks across the country have increased thresholds to access their money.  This is impacting credit cards, personal loans, mortgages, and home equity loans.

For example, despite credit card rates being at a three year low, according to CNBC, over 50 million credit card customers have either seen their account spending limit reduced or had their accounts closed altogether.  Non-secured personal loans might be possible but require high credit scores.  Some mortgage options, like cash out refinances and jumbo fixed-rate mortgages, have been eliminated.  Other products require 20% down and a minimum 700 credit score.

Home equity loans, or Home Equity Lines of Credit, have not been spared.  Giant national banks like Chase and Wells Fargo have temporarily frozen their home equity products.  Even when they’re available, credit score requires have increased by nearly 10%, according to BankRate.com.

How does this effect you?  Clearly overall access to cash is severely limited.  And, as a homeowner hoping to use their equity as collateral, banks are increasingly a limited resource.  And, even if they are, loan recipients are required to pay fees and ongoing interest.  Fortunately, that is not the case with SmartRE. 

We only charge a low, one-time fee when your home equity sells on our platform.  We never charge interest.  We have no payback period and no inheritance issues.  And access to our buyers requires no minimum credit scores or income.  All you need is ownership of 50% of the value of your home.  Visit We Can Help to learn more about our process.