Answers about Home Equity Lines of Credit and Home Equity Loans

The bank just reduced my Home Equity Line of Credit (HELOC) so that it is equal to the amount I have already borrowed. I am worried that if they reduce the limit any further that it may raise my payment. Is this possible?

No. Federal law prohibits the bank from decreasing your HELOC to an amount below your current balance if it would raise your required payment.

For example, assume that a HELOC originally was approved for $10,000 and the consumer has borrowed $5,000. If federal law permits the lender to reduce the credit limit, it could not set the new credit limit below $5,000 unless the consumer's required payments stayed the same.