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I own a small business and want to time the receipt of taxable income to minimize taxes, so I am sometimes short of money in my personal account even though my overall balance sheet looks very good. So I use the HELOC for personal expenses when I am deferring income to a different year…then pay it off immediately when I decide to take the income.
You want to know if a line of credit is insured by the FDIC? Why would the FDIC insure a LOC? What happens if your mortgage lender goes bankrupt? It's sold to another financial institution
My monthly bank statement mentioned that a HELOC is not FDIC insured—that was several years ago so I assume it had to do with 'Dodd Frank'. Anyway, I'm confident in my guess that many a HELOC homeowner will naively think that [their] equity would be FDIC safe.
As for a bank bankruptcy, I highly doubt that there's no inherent risk/hassle in having a HELOC transfer over to another financial institution. Feel free to explain the smooth transition of the transaction/equity. I'll be the 1st to admit that my presumption is wrong.
My monthly bank statement mentioned that a HELOC is not FDIC insured—that was several years ago so I assume it had to do with 'Dodd Frank'. Anyway, I'm confident in my guess that many a HELOC homeowner will naively think that [their] equity would be FDIC safe.
As for a bank bankruptcy, I highly doubt that there's no inherent risk/hassle in having a HELOC transfer over to another financial institution. Feel free to explain the smooth transition of the transaction/equity. I'll be the 1st to admit that my presumption is wrong.
Why would home equity be FDIC insured? Anyone who assumed or thought that simply doesn't understand FDIC coverage. FDIC covers deposits. Equity in a home or debt is niether.
Mortgages get sold all the time it doesn't just go away then either. There is no transfer of equity your equity secures the line of credit. You are just way off on both angles
My monthly bank statement mentioned that a HELOC is not FDIC insured—that was several years ago so I assume it had to do with 'Dodd Frank'. Anyway, I'm confident in my guess that many a HELOC homeowner will naively think that [their] equity would be FDIC safe.
As for a bank bankruptcy, I highly doubt that there's no inherent risk/hassle in having a HELOC transfer over to another financial institution. Feel free to explain the smooth transition of the transaction/equity. I'll be the 1st to admit that my presumption is wrong.
You don't "transition" equity.
I have equity in my condo because my condo is worth $XXX,XXX and I currently owe $YYY,YYY to a bank. Equity is just the difference between the value of the asset vs the liability(mortgage here).
If my mortgage gets sold to another bank(either because Bank A goes bankrupt or they just want to sell it), it has nothing with the equity. I still owe the same amount, and my property value doesn't change just because I send a check to BoA instead of Chase for example.
With a HELOC, it doesn't change anything regarding that, and there are a few things wrong with your terminology.
First, you can't insure a line of credit. Your credit card isn't FDIC insured either. When you put cash in a bank, that's insured to guarantee that even if the bank catches fire tomorrow and loses every penny, you can still get your cash back. What would Insurance protect on a line of credit? The closest thing I can come up with is that even if the bank closes tomorrow, you can still borrow money from the bank?
No, FDIC doesn't guarantee that.
Regarding the transition, if I've already borrowed against the LOC, then it's actually debt at this point and is treated exactly the same way as my mortgage. The debt will be sold when the bank goes under to a second bank and my check is now sent there.
Your Equity is safe as long as your property value doesn't decrease. That is the only thing that can take away your equity. And the FDIC is absolutely not in the business of insuring your property value only goes up, but I don't think anyone is naive enough to think they are.
Why would home equity be FDIC insured? Anyone who assumed or thought that simply doesn't understand FDIC coverage. FDIC covers deposits. Equity in a home or debt is niether.
Wow, I didn't realize I'm talking to a illogical genius. The bank stated that a HELOC is not FDIC insured. Why did they bother to tell me something as irreverent as that?
Lastly, IMHO, you dodged my simple questions; I think it's called a 'strawman'?
^^Wow, I didn't realize I'm talking to a illogical genius.The bank stated that a HELOC is not FDIC insured. Why did they bother to tell me something as irreverent as that?
Lastly, IMHO, you dodged my simple questions; I think it's called a 'strawman'?
That is the true question. What exactly does the statement say? Because I've never seen any bank stupid enough to think they need to indicate that a line of credit isn't FDIC insured. You might need to start worrying about the intelligence of your financial institution if they're really saying that.
^^Wow, I didn't realize I'm talking to a illogical genius. The bank stated that a HELOC is not FDIC insured. Why did they bother to tell me something as irreverent as that?
Lastly, IMHO, you dodged my simple questions; I think it's called a 'strawman'?
You didn't actually ask a question. Your op said youd find out if the heloc was FDIC insured, none are and even mentioning it shows your ignorance
^^Wow, I didn't realize I'm talking to a illogical genius. The bank stated that a HELOC is not FDIC insured. Why did they bother to tell me something as irreverent as that?
Lastly, IMHO, you dodged my simple questions; I think it's called a 'strawman'?
This would be a standard disclosure
Quote:
Site Map | Privacy | Security | Accessibility | Terms of Use | Bank Deposits FDIC Insured | Equal Housing Lender
Important Disclosure Regarding Deposit Insurance on Noninterest-bearing Transaction Accounts (FDIC)
SECURITIES AND INSURANCE
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
Securities and other investment and insurance products are: not a deposit; not FDIC insured; not insured by any federal government agency; not guaranteed by TD Bank, N.A. or any of its affiliates; and, may be subject to investment risk, including possible loss of value.
Jeo123: A little on the condescension side, but I got you, & I agree. Why did the bank--on a bank statement--mention that a HELOC is not FDIC insured? I'll fish through my papers when I get a chance to see if it specifically said FDIC insured or just insured.
Jeo123: A little on the condescension side, but I got you, & I agree. Why did the bank--on a bank statement--mention that a HELOC is not FDIC insured? I'll fish through my papers when I get a chance to see if it specifically said FDIC insured or just insured.
Even if it did say what you thought which makes zero sense in a functionality that has zero to do with the FDIC insuring equity as you assumed
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The bank stated that a HELOC is not FDIC insured. Why did they bother to tell me something as irreverent as that?
