In article ,
SMS wrote:


However one strange thing I came across when re-financing my house was
that a high HELOC limit was bad. They said that they treat the HELOC as
if it were maxed out and I were paying the minimum amount each month,
even when it's not being used at all. Yet high limits on credit cards,
that could also be maxed out at interest rates 4-8 times as high, were
not a problem. Or maybe because it's so expensive to get cash advances
on credit cards they are less worried about it. Yet a HELOC is a secured
loan so I'd be much less likely to default on it, while credit card debt
is unsecured.

The HELOC is another encumberance on the same property. So, you were
probably hit more because the HELOC (even though unused, but could be)
effectively lowered your equity in the house. If you were buying a car
instead of refinancing a house, it probably wouldn't have impacted as
much.

--
"Even I realized that money was to politicians what the ecalyptus tree is to koala bears: food, water, shelter and something to crap on."
---PJ O'Rourke