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Know your options before you tap into your home for emergency cash

Know your options before you tap into your home for emergency cash
Posted at 2:11 PM, Apr 23, 2020
and last updated 2020-04-23 15:13:12-04

DURHAM, N.C. – Many are struggling for money right now. You may be considering tapping into your home for emergency cash.

In our effort to help you rebound from the coronavirus pandemic, we want to make sure you know your options to help make ends meet.

Home equity lines of credit let you borrow against the equity you have in your home. They operate in many ways like a personal loan.

“Typically, in kind of what we would call more stable economic situations, it operates as a really good option for families,” said Nikitra Bailey with the Center for Responsible Lending. “The challenge that we have now is we're facing this global pandemic where people aren't sure what's going to happen to them at the end of it.”

Lenders are making it harder to get home equity lines of credit because of this uncertainty.

JPMorgan Chase has temporarily stopped accepting new applications for this altogether. If you already have an application in, the bank says it will continue to review it. It's suggesting refinancing as a better option.

Wells Fargo is one major bank still offering home equity lines of credit for now. Through, it raised the minimum credit score to get one to 720.

Banks are also willing to lend out less money through these loans.

The Center for Responsible Lending has a warning if you're considering this.

“Consumers have to be really careful that their financial situation will maintain, and they can afford any additional credit that they might borrow for,” said Bailey.

She recommends talking with a financial advisor or a certified housing counselor to make sure it's in your best interest.