Amerisave Home Equity- any experience? (1 Viewer)

I recently moved into a new home in the ridiculously overpriced NoVA area. As such, I ended up with an 80/10/10 mortgage, to get a place I actually felt like driving home to after a 12-hour day.

In any case, the 10% HELOC that's pre-packaged has a crappy rate (as they usually do, so my mortgage-broker friend tells me), and I want to fix that.
I'm getting jerked around at my local Bank of America (classic bait-and-switch), so I'm shopping the web.
I came across Amerisave, which is running Prime -.38% (life of loan), for 90% LTV, so their page says. Before I get into their application process, I was wondering if anyone had any other input or ideas, or dealings with Amerisave.

Thanks,

Todd

Did you say the rate was Prime minus .38% fixed for the life of the loan. And, that's for a 90% LTV.

I'm a Mortgage Broker that sounds too good to be true.

What does your friend say. Can you give any other details.

Their web page says "life of line". Whether that's a typo or has meaning is another question.

Mort

It is possible to get a 30 year fixed rate loan for about 5.375 for a good sized loan. Maybe that's what they were quoting

Jim- here's where I got that crazy idea.

http://www.amerisave.com/homeequity.html

The question I have is- why *won't* I qualify for the Premier HELOC, that would guarantee the best rates. From my POV, I have no reason not to, but I'm sure they'll come up with something. That's the "hook," I suppose.

I'm sure not keeping the Prime +1.5 for long. I'll just pay the damn thing off first.

OK I know where I went wrong. I interpreted the rate being fixed at the current prime rate less .38%.

What is really happening is that if prime changes your rate changes, so your rate is not fixed. This is no big deal as most equity lines are structured like this.

As to your qualifying I don't see why should'nt. Just get a copy of your credit report from your current lender and look at your scores.

The only catch is if Amerisave insists you have a really high score

Ok. Maybe I'll be the guinea pig for them, and see how it goes.

Jim- I can't imagine that my FICO would be too low to get the best rate. We'll see, I guess.

Yes it means that your rate will float at .38 below prime. Prime is a good rate to follow and usually does not make drastic ups and downs. But your payment will vary.

I knew this from the beginning, if that wasn't clear.

Keep in mind the Fed has been in tightening mode for some time now. So each time they raise the Fed Funds rate by .25 the Prime will automatically raise too.

Don't know if this is a big concern for you but it should be considered. In any case the deal Amerisave is offering is a lot better than BofA.

Most of the fixed HELOCs or 2nd mortgages in general that I can find, are in the 6.75-7.25% range. I know the rates are rising, but I intend to pay this HELOC down quickly, in about 4-5 years. As such, I think I might "beat the curve," if you will, on the rise in rates with a variable, since I'd be starting at 5.12 (Prime -.38), vs. 6.50 (Prime + 1.0) as BofA wants to give me, vs. what I currently have (Prime +1.5).

Or, should I even bother trying to flip what I currently have? The interest savings is about $70/month going from 6.75% to 5.12%, and since both adjust, would stay that way. Even over a 4-5 year period, it looks like I'd save 2500-3000 in interest costs alone, if I'm figuring right.

Todd

I'd say going for the Amerisave deal is your best move since your savings against BofA is guaranteed.

I'm personally more of a cash flow guy so I would probably refi the entire note on a 30 year fixed.