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Thread: Accelerator Home Loan

  1. #1

    Accelerator Home Loan

    Has anyone seen this? At first glance it looked pretty good but then on closer inspection it is adjustable line of credit home loan. Adjustable being the key word. Just another spin on home financing IMHO. I wish I knew more about finances to be able to make a informed decision on money matters such as these, especially with the way our present economy is.


    http://homeownershipaccelerator.com/

  2. #2
    Senior Member Timaru's Avatar
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    This doesn't answer your question but does give an idea of the mental processes of the financial industry.

    It was posted in the general section of a fishing forum I'm a member of in response to questions re. the sub prime debacle.

    I hope it's of some help.........

    Interesting to hear Fred's story. I was early in my career back then, dwelling among the bottom-feeders in the same industry. I worked in your basic "mouse house"...we did personal loans on anything, including nothing, so long as we could "qualify" you and you'd pay the fees and interest. Max agreed rate in Washington State was 25% (unsecured) and we charged all of it. Then, once I sold you credit insurance, an auto club membership or maybe a book of shopping discounts, your APR came out north of 30%. Of course I'd play hell for the next 3 years keeping you in the 93% of our portfolio that paid on time.

    Anyhow the so-called home run of our product list was a 1st lien refi/bill consol that penciled out at a rate of 16.9%. The program allowed for 90% LTV against appraisal, then I could add fees & credit insurance to take the total amount financed to well over 100%. Fee alone was 10%, financed but paid up front along with any premiums. I think we allowed credit scores all the way down to 575. These deals promised a lower overall monthly payment for those who were saddled in debt with the promise/hope of outrunning it via escalating housing prices (Seattle/King County was a proverbial hotbed for this). Main thing was, these folks weren't exactly the types who could be put on a strict budget and adhere to it.

    I can recall every detail of the last two home runs I did in that job. Never mind it all. What sticks out was they were both decent guys like the rest of us, one an auto mechanic who worked his ass off for his family, the other an Army Core Of Engineers worker who operated one of the dams. Like a lot of people they didn't quite understand the whole personal finance/credit game but certainly didn't deserve the polished turds we were selling them. I figured if I stayed in any longer I'd grow sharp teeth and a large dorsal fin, so I also got out.

    In our case, we also wanted to keep the borrower in the property but it was more of a "trap" situation. The high LTV, along with a prepay that ran a farmer's mile, meant that sale or another refi were not options for the foreseeable future.

  3. #3
    Super Moderator Sue Pendleton's Avatar
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    Quote Originally Posted by garlin
    Has anyone seen this? At first glance it looked pretty good but then on closer inspection it is adjustable line of credit home loan. Adjustable being the key word. Just another spin on home financing IMHO. I wish I knew more about finances to be able to make a informed decision on money matters such as these, especially with the way our present economy is.


    http://homeownershipaccelerator.com/
    Man, more high schools should teach personal finance basics. You're right Garlin, this is not a good deal. Never, IMH, not a professional mortgage person, O is never have your regular checking account hooked to a home equity loan account. The HEL will suck that account dry as you write checks directly from the loan account.

    What are you trying to accomplish, if I may ask? If you want to add more equity to your home and cut your overall interest payments on your home mortgage you can make an extra payment every year or send an extra $25 or whatever every month. To make this clear to your mortgage company write two checks and in the memo area of the second write "apply to principal only" otherwise they'll put it to interest and that doesn't do much for you. The real benefit here is you can skip these extra payments if you hit a tight spot because there is no refi. And no added refi costs added to your current balance.

    If you have an ARM and need to refi or die that's another whole enchilada. So, in general terms, what info do you need help understanding. And if mortgages were easy to understand they wouldn't require 121 pages of fine print and 62 signatures. Yea, I do the refinances and the spousal unit just signs where the marks are. We accelerated to a 15 year fixed when this subprime thing started. Now I'm trying to find something else as tax deductions because without kids, well, Uncle Sam gets us good.
    Courage doesn't always roar. Sometimes courage is the quiet voice at the end of the day saying, "I will try again tomorrow."

    Disclaimer: Answers, suggestions, and/or comments do not constitute medical advice expressed or implied and are based solely on my experiences as a SCI patient. Please consult your attending physician for medical advise and treatment. In the event of a medical emergency please call 911.

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