Refinancing:BEWARE!!

With current interest rates what they are, my wife and I decided to go for a mortgage refi on our primary mortgage from a 30 to a 15 year note. The process has been quite a bit more tedious than the last time we did this complicated by the fact that I started my business last year after being at a salaried job for 3 years prior. We got approved last week finally and were planning on signing all the papers this week. My business has a line of credit that is collateralled by our home. Yesterday I got a call from an underling at the bank saying that my business LOC has been frozen!! Turns out the LOC should have never been given in the first place and the person who gave it to us is no longer with the bank, complicating things further. After many not so pleasant phone calls on my part I finally got to somebody who spoke to me like a person not a number on a balance sheet. Here's the thing. The bank would have never even known that there was an issue had we not gone for the refi. Moral of the story:

Be very careful in this new financial scenario. If you have an LOC either personal or business that is tied to your property, the bank will scrutinize this to the nth degree. I just heard another story of a landscaper who uses his LOC during the lean winter months to get him through who just had his not only frozen, but taken away completely leaving him with very few options to make ends meet this winter.

Fortunately for us we do a lot of business at this bank and are good customers. The bank is back peddling big time trying to keep us and it looks like all will work out in the end.