Might bank cancel our HELOC if they find out our income is 50% lower now?

[RedwoodDreams]

I'm thinking about refinancing our house to fold our HELOC balance into the loan, but I'm a little nervous about asking our credit union (which holds our current mortgage and which we've been members of for 30 years) about their loans and rates and having them realize our income is now 50% lower than it was when we applied for our existing mortgage and HELOC, and then deciding to cancel or freeze our current HELOC as a result. We rely on the HELOC for IRA and HSA contributions that help us get a good ACA subsidy, and as a safety net while we survive on disability income, so if there's any chance of messing that up, I don't want to do it.

[reeshau]

You probably have a clause in your existing HELOC requiring you to disclose any changes in your income.  I understand your dilemma, but yeah they will want updated info.

[Another Reader]

You probably don't qualify to refinance with half your former income.  And yes, they may ask for updated income information if you ask for a large draw on the HELOC.  In your shoes, I would let this sleeping dog lie.

If you don't have employment (earned) income, you don't qualify to make IRA contributions.  If you do not expect to have earned income for 2019, do not contribute. 

[use2betrix]

Could you consult other banks first and see if you would qualify (maybe less than ideal as your credit union). That way if things go south with your credit union, you have other reasonable backup plans.

[frugaliknowit]

Yep, they will look at your income.  Let "sleeping dogs lie".

Also:  "We rely on the HELOC for IRA and HSA contributions that help us get a good ACA subsidy, and as a safety net..."

Dude, borrowing (against your house) for IRA/HSA contributions...Phew!  Tread carefully..

[RedwoodDreams]

You probably don't qualify to refinance with half your former income.  And yes, they may ask for updated income information if you ask for a large draw on the HELOC.  In your shoes, I would let this sleeping dog lie.

If you don't have employment (earned) income, you don't qualify to make IRA contributions.  If you do not expect to have earned income for 2019, do not contribute.

Thanks. I think we still qualify (if I'm looking at DTI properly).

My disability income from my former employer is W2 earned income, thankfully, which leaves us very helpful IRA options.

[RedwoodDreams]

Could you consult other banks first and see if you would qualify (maybe less than ideal as your credit union). That way if things go south with your credit union, you have other reasonable backup plans.

Excellent idea. Thanks.

[RedwoodDreams]

Yep, they will look at your income.  Let "sleeping dogs lie".

Also:  "We rely on the HELOC for IRA and HSA contributions that help us get a good ACA subsidy, and as a safety net..."

Dude, borrowing (against your house) for IRA/HSA contributions...Phew!  Tread carefully..

I know ... it feels like a house of cards to some degree, but that is life on disability income. Thankfully, we lived as mustachians for decades so although we live in a HCOL area, we have a hefty nest egg and own about half of our HCOL house, even with the HELOC use. Worst case, we will have to sell. But hanging on for now. Putting the HELOC money into HSAs and IRAs means my family qualifies for affordable insurance. Still. <gulp>