Two HELOCS

What happens when refinancing a HELOC with a different lender, if the bank never closes out the existing HELOC? Can both HELOCS be used, and what happens if they are both used? Say there is 400k combined on both HELOCS on a 200k property.

If the one HELOC is not paid off and closed out when you refinance it with a new HELOC then the refinancing never happened. You simply obtained an additional line of credit. Having two HELOC’s available that exceed the value of the security property could be a real financial trap. First I would suggest closely reading the HELOC loan docs to determine if there is a clause addressing borrowing more than the property value, second I would suggest not borrowing more than the property value from either or both lest you get caught in a squeeze.

Are there normally clauses in HELOC contracts about borrowing more than the property value?

I understand that 2 lines could become a real financial trap, but wouldn’t it be similar to having one HELOC of 200k and a business line of credit of 200k? What difference does it make that both are HELOC’s, and not one HELOC and one business line (i.e. snap loan)?

I can’t attest to specific HELOC clauses. Whether you call it a business line of credit, a loan or a HELOC you still end up with two lines of credit secured by your primary residence and if you fail to make your payments you risk losing that residence. You understand.