Millions of American home owners with home equity lines of credit could soon be in for a payment shock.
A new study by RealtyTrac finds that more than half of the 3.3 million borrowers with home equity lines of credit facing an interest rate reset from this year to 2018 still owe more on their mortgages than their homes are worth.
Home equity lines of credit are usually second loans after the primary mortgage and were popular between 2005 and 2008.
But after 10 years, the initial low interest rates can reset to higher interest rates.
And borrowers are no longer allowed to draw funds from the credit lines.