The rules change when the economy goes south. Whatever you heard from NPR or Grandma, like always pay more than the minimum on your credit cards, retire your mortgage as soon as possible, and a home equity line of credit (HELOC) is the best second mortgage because of its flexibility, isn't necessarily true when times get tough.

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HELOCs have always been touted as the best way to fund many projects--anything that doesn't require a large sum all at once. You can use a HELOC to provide emergency cash flow for a business, finance an extended, do-it-yourself home improvement project, pay annual college tuition, or just have it open in case of emergency. The beauty of a HELOC is that you can use it and reuse it, and you only pay interest on the amounts you use.

Well, the new rule of the HELOC is use it or lose it. Lenders are cutting off HELOCs faster than faster than Jimmy Swaggert shuts down adult book stores. Homeowners are finding themselves at a loss. Imagine relying on a HELOC for your business, only to find out that your credit has been cut off and your payroll checks will bounce? As housing values fall, lenders are trying to minimize the potential for balances to exceed property values, and even borrowers with perfect repayment habits are finding their credit cut off at its knees--well, it would be if HELOCs had knees.

So, if you have a HELOC, tap it--all of it--while you still can, and stick it in savings until you feel financially secure. If you are looking for a home equity loan, consider a straight loan that delivers the entire sum at closing and can't be reduced if your home's value falls. Or get a HELOC but take all the funds right away. You can also look into a cash-out refinance--FHA allows you to mortgage up to 85% of your home's value. But get whatever you need as soon as you can--in this economy, cash is truly king.