Why Would Liquid Assets Needed for HELOCs

Why Would Liquid Assets Needed for HELOCs

Liquid assets are things like Checking and Savings Accounts, Stocks, Bonds, CDs, Mutual Funds, Money Market Accounts, EFTs. These liquid assets would be used towards building up more equity for the property OR to pay off some personal debts, depending on what the lender suggests. Some lenders want at least 3 months of payments in liquid asset form when a person has a DTI Ratio of 45%. Some non-liquid assets are things like Precious Metals, Crypto, Pensions, 401Ks, Annuities which only count as 60% of their market value unless they are liquidated in order to count 100% of their values.