"I realize my LTV ratio is low and my FICO is high, but you'd think they'd discourage using the house as an ATM on a rainy day." Why would they discourage that? There is nothing inherently wrong with using leverage. There is nothing inherently wrong with using your home's equity to further your financial goals. Using leverage you can't pay back is what's wrong. You sound like a good credit risk & banks are in business to "sell" money. If nobody borrowed...there would be no banks for your savings. It's simple. Banks take your savings & lend it to others...hopefully to credit-worthy borrowers like you. A disciplined investor will allow their real estate's equity to work for them rather than sit there as dead money. HELOC's did not cause the financial breakdown. Borrower's poor discipline & decision-making skills did, however, contribute to the debacle. Based on your "high FICO", you do not sound like one who made poor decisions. BTW, I also agree with your banker about the CDs rather than savings accounts. Laddered CDs works well for safety net savings & usually pays a higher yield. Why would one not take advantage of that opportunity? It's not likely a person would need an entire year's worth of living expenses all on the same day...so keep some amount in a cash account, ladder the rest in CDs, & keep rolling them. I do not agree with your banker that a HELCO is a substitute for an emergency cash fund. Doing that could quickly turn you from a credit-worthy borrower into a statistic. /tricia PS You WANT your bank to encourage credit-worthy borrowers to take out that HELCO, don't you? If not, how do you expect them to stay in business? While I'm on this toot...another thing to remember is that if everybody followed the advice on this forum & never carried a balance on a credit card...there would be NO CREDIT CARDS FOR ANYBODY because CCs are not a convenience that bank's offer from the goodness of their hearts. They are supposed to make money for the bank. Now, it's true that a well run bank can either break even or make a miniscule profit from just the fees they charge retailers...no bank would assume that risk. So, if you enjoy having the convenience of a CC...be glad some people carry CC balances. And if you like having the convenience of banking services be glad some people borrower for a new car, use their home's equity to pay for higher education, use a HELCO to purchase income-producing property, borrow to start their own business or expand an existing business, & even borrow to spread the cost of that once-in-a-lifetime world cruise over five years. "Loan" is not a dirty four-letter word. I am sick. I am cranky. I am tired of this generalized bank bashing. Let's just put all of those "banksters" out of business. Heck, we'll all just stash our cash under the mattress & barter for our food. Cash & carry all the way. That will teach those "banksters" a lesson! Since September 28, 2007, the FDIC reports closing 54 banks (www.fdic.gov). The FDIC had better get cranking...heck, they're not even busy yet as compared to the S&L Crisis. The problem with this "crisis" is that it's hitting our money-center banks the hardest. Due to counterparty risk, a pro-active solution was required. Those counterparties included many international banks, our largest institutions, & several states (CA, VA, HI, as examples). A.I.G. was acting as sort of a conduit to funnel money to dozens of financial institutions around the world. If AIG failed most banks in Europe wouldn't have gone down with them. These are mostly banks who bought insurance from AIG against the possibility of a global financial meltdown. AIG is hopelessly tangled in our money-center financial institutions' well-being. Letting them turn out the lights & last man out lock the door wasn't an option folks. ...rant spoken tongue in cheek (sort of). And, since I have just been diagnosed with Sjogren's Disease my tongue is permantly stuck to my cheek!! :( Here is a link that might be useful: Wiki: S&L Crisis

Things really are crazy now for sure- I am the one who posted before out my HELOC getting frozen right in the middle of my major house renovation. I decided to contact another bank for a new HELOC, and at the same time went down the path with my existing bank providing a new appraisel. Before we did our renovation, we had two realtors come to our home to advise us on what houses were selling for in like size, condition to ours, and what they thought the renovation might add. They both replied with a number that was very close to each other, assuming that things do not change too much (we live in a very desirable part of town, that did not get the huge run up on prices and no big drops lately). Then, the appraisor gave us another number, about 20% lower than the realtors but high enough to continue our HELOC if our original bank actually wants to do so. Then, the new bank denied us a HELOC, stating that their compturized valuation came in too low- It was so low it was laughable- it was almost half lower than our actual appraisel. Now, I understand being conservative, but that is ridiculous. I almost wonder it they had the wrong house. As by chance, on the same day the county sent us our new assessment, which went up by 10% of course. At this point, our contractor has to be paid and the original bank is taking forever to review our new appraisel and I am about done with the whole thing. We are very fortunate in that I am going to be able to sell enough stock to cover what we owe, but it was not what I planned when I started this whole thing, and I hate putting so much more cash into the house. Even with the HELOC, we would have been at 80% LTV, and now we will be more like 60%. We don't plan to sell for at least 10 years, so at least I can enjoy my investment :)

Zanna 3, On my LOC, fully secured by stocks and mutual funds, the rate they quoted a while ago was 6.25%, but the Bank of Canada put their rate up 1/4 point the other day, so it's likely 6.5% now. I haven't used it for some time. Haven't shopped around for competitive offer, either, as I don't plan to use it soon. Do they charge you set-up and/or appraisal fees, or a fee if you let it sit unused for a period? They haven't me. I don't mind borrowing for purposes of investment that I feel has a good posibility of increasing my assets, when I think that conditions warrant. But I rarely borrow for consumer goods or activities, as it seems to me that suggests that I'm living beyond my means. I don't like contracting to pay next year for stuff that I wanted this year but couldn't afford to buy using current income. That makes a double whammy on next year's income, for I have to pay for stuff that I ate this year. Plus I have to pay the guy who owned the money for the privilege of using his, for a while. I claim that I can borrow to invest in quality stocks (or some other assets) for, frequently, almost no net cost. Good wishes as you find more effective ways to manage your money. ole joyful

Can you get a HELOC from a lender that does not charge a fee for early termination? We got our HELOC through USAA (same place as our mortgage) and we have absolutely NO penalties. We also got a low rate - prime minus 1. If you qualify or already belong to USAA, check them out. We have all our c/c's with them as well as our mortgage, home insurance and some investments.