For homeowners looking to take out new applications for home equity lines of credit, they may be out of luck with some of the larger banks.
A few of the major banks in the United States still have a pause on accepting new applications for home equity lines of credit, known as HELOC, amid what they describe as economic uncertainty.
A HELOC is a line of credit that allows homeowners to borrow against the value of their homes, which can be used for large expenses ranging from home repairs or improvements.
Home equity lines of credit are still popular among homeowners in light of rising values and dwindling inventory in the market.
With mortgage rates high, and inventory levels still low, it’s a viable option for homeowners to upgrade their homes without having to move into a new one, and possibly have to do the same, says Melissa Hoff, of The Hoff Group at Compass.
"A lot of people are still going for HELOCs because their property values have gone up and they have money sitting there,” Hoff said. “In some cases, they are taking money out of their homes to do repairs rather than move somewhere else in today’s market.”
WellsFargo, Chase and CitiBank are among the banks that have paused new applications on them over the past few years, according to statements from the banks.
Chase Bank paused its applications right as the pandemic hit, as well as WellsFargo. According to a statement from Chase, it is only serving customers who already have a line of credit with the bank, but it is currently not accepting new applications for one.
“While HELOC applications aren’t available at this time, we still offer ways for customers to access their home’s equity, such as a cash-out refinance. There are no additional HELOC updates at this time,” a spokesperson said.
Wells Fargo also put a pause on new applications for home equity lines of credit back in 2020. At the time, the bank said that it was a reflection of current market conditions. The bank did not return request for comment.
CitiBank halted its applications in March of 2021, but plans to reintroduce the product by early next year.
Despite this, there are still banks that are providing new home equity lines of credit for homeowners who are looking to use their equity in their home, noted Hoff.
Banks such as PNC and Bank of America are accepting new applications.
