2nd Mortgage HELOC Converting to Repayment Period

[athuddriver]

Hello Folks,

I have a 2nd Mortgage that has been a Home Equity Line of Credit (HELOC) for nearly 5 years.  At the end of that period it reverts to a loan with a 20 year repayment plan.  This occurs next May.  It is my understanding that it is currently treated as a revolving credit account (like a credit card).  With that assumption, I have a few questions:

1.  Is my assumption correct?

2.  Does this kind of account get recategorized into a non-revolving kind of account?

My thoughts are that if it does convert to a non-revolving account that my total available available credit will drop.  This would result in a higher percentage of available credit in use which I would assume could have a negative impact on my scores. 

None of this is a serious impact on my overall financial situation.  The terms of my HELOC are pretty darn good.  It runs at 1/4 pt below Prime and it is my lowest effective interest rate of all my debts. 

My thought is that I have about $20K left on credit cards and I have room to move them to the HELOC as it matures thus emptying all of my revolving credit from that category into (if my assumptions are correct) a non-revolvoing category.  The net effect is that except for a credit card we use daily (which is always paid off every month) we might be at 0% usage of revolving credit available.

Any thoughts?

TANX!!!

[ShanetheMortgageMan]

HELOC's usually report as revolving although I've seen some that report as installment or mortgages.  It's up to your lender if they want to change the trade line type to anything other than revolving once it coverts to the fixed rate period.  My guess is that it would stay as a HELOC still, since it is just going into repayment and not switching to a completely different loan program.