Your Home Equity Loan May Tip You Into Negative Equity

Right now, mortgage lenders are a little wary. They've tightened their credit requirements, making it more difficult to get home mortgage loans. And now it's starting to affect the home equity loan. Not only are mortgage lenders pulling back on how much they are lending, they are also pulling back on how many they qualify.

And that's not all. If you have a home equity line of credit, you may have found that it is shrinking. This is because mortgage lenders are reaching into that pool as well, in an effort to mitigate some of the pressure they are feeling in response to credit market stress.

Another thing to watch out for is negative equity. The current decrease in home values across the country may mean that your current home equity loan may have tipped you into negative equity. Take a good look at where you are at, and make sure that your home equity loan hasn't caused you this problem. And if it has, now might be a good time to start making some extra payments if you can swing them.