South Tampa | Mortgage Accelerator (Home Ownership Accelerator)

By
Mortgage and Lending with Your Tampa Bay Mortgage Source

Lady with Money BagTampa, Florida - Home Ownership Accelerator is the new mortgage of choice for many home buyers looking for creative home financing options!  Have you heard of this mortgage product...The Home Ownership Accelerator?  This is a revolutionary home finance product sweeping our mortgage industry.  I am starting to see more lenders, REALTORS, and consumers in Tampa, St. Petersburg and Clearwater asking about the product.  As your Tampa Mortgage Source, I am going to give you all the information I know on it, in as much summary as possible.

I do have a disclaimer...I am a conventional loan gal, I love a 30-year or 15-year fixed rate loan, no prepayments, no hidden fees, as basic as it gets.  So, when I first heard about this product, I was really skeptical.  I have done quite a bit of research on it over the past couple years, took some baby steps, talked with other customers who already had the loan to see what they thought about it, took some more baby steps, got my certification to write this loan and am now happy to report I am a fan of the product.  HOWEVER, IT IS NOT FOR EVERYONE!!!  This is the key, it is a home finance product for someone who is financially in-tune, has positive cash flow, has great credit and has at least 20% equity in their home.  With all that said, here is what my basic education of the product:

With the Home Ownership Accelerator, you will:

  • Save thousands in interest
  • Pay off your loan years earlier
  • With no changes in spending

How it works:

  • First, we finance up to 80% of the value of your home with the Home Ownership Accelerator
  • Your paychecks are then directly deposited into your new line of credit, which will greatly reduce your principle balance
  • When you need funds for any expense, it works just like a bank account
  • You can use unlimited checks, ATM and online bill pay
  • Your money stays in your account until you use it, keeping your loan balance lower, saving you an average of 5-6% in interest costs, instead of earning you an average of 1-2% in the bank
  • Your paycheck drives your loan balance down, and even if you spend most of your paycheck each month, your average daily balance is much less
  • Interest is calculated on your lower daily balance, so you save interest which leaves more money for principal

How you save interest:

  • The money you didn't need stayed in your account, keeping your principal balance lower
  • The monty you did need for expenses saved you interest, while it waited around to be used
  • Your interest savings roll into next months principal.  This effect compounds each month so you can pay off years earlier, compared to a traditional loan.  In fact, your loan balance being so much ower offsets the impace of rising interest rates, even if rates double!

And the best part...you do this with no change to your current spending!

 What makes this loan so different?

  • A regular mortgage has a fixed monthly payment with a small impact on principal and you are sometimes charged a pre-payment penalty if you pay off early
  • The Accelerator has no monthly payments, you have 24/7 access to funds, and you can get your money back if you need it.  Your money is put to work at higher effecive rate and these is never a pre-payment penalty

Here is an example:

Net Income = $84,000

Month-end savings = 10% of net income

Current loan = $150,000, 30-year fixed at 6%

The 30 year fixed loan takes 30 years to pay off!

The Accelerator takes 11.2 years to pay off (a savings of 18.8 years in interest)!

The total interest paid on the 30-year fixed loan is $323,757 (APR of 7.44%)

The total interst paid on the Accelerator is $218,308 (APR of 6.17%)...$105,449 IN INTEREST SAVINGS!

You would have to be ablet o secure a 30-year fixed rate loan at 2.67% to pay the same total principal and interest as the Home Ownership Accelerator loan.  (Where can you get a rate like that in Tampa?)

Interested in learning more?

For a free test-drive of the Accelerator's simulator, visit http://www.amerifirsthoa.com/ or email your Tampa Mortgage Source directly for a complimentary consultation.

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Read more on the Home Ownership Accelerator:

Tampa Mortgage: Should I Pay It Off?

Comments (14)

Jack Haydon
Charles Rutenberg Realty - Clearwater Beach, FL
Clearwater Beach Condos - Real Estate Homes for Sale
Leah, Wow another insightful post  - keep that timely info coming. Always enjoy reading your posts.  
Apr 03, 2007 07:15 PM
Robert D. Ashby
Visual Approach Aerial Photography (Visual Approach Photography) - Plantation, FL
Turning Visions into Photographs (and Videos)

Leah...god post on the HOA.  I do the product as well, but it is not always the best solution for the homeowner.  It depends on their goals.  I did a blog about this fact a while ago and can post a link here if you want.

Apr 24, 2007 02:29 AM
Renee Kokoszka
Citizens First Financial - Park City, UT

Leah,  I have heard a ton about this product and I have a couple of questions:

Suppose I choose this,  I am refinancing my entire loan correct?  (This isn't an equity line or a 2nd).

What is the going interest rate?

I have to ask - whats in it for you?  Whats the cost of the program? 

Apr 24, 2007 06:27 AM
Tom Burris
NMLS# 335055 - Baton Rouge, LA
Texas/Louisiana Mortgage Pro - 13 YRS Experience
These 1st lien helocs scare me.... because isn't it a 1 month ARM?
Apr 25, 2007 05:33 AM
Leah Ross
Your Tampa Bay Mortgage Source - Tampa, FL
Tampa, Florida Mortgage
Robert, thanks for the comment.  I agree, it is only for MAYBE 5% of homeowners.  Please feel free to post your link.
Apr 25, 2007 02:41 PM
Leah Ross
Your Tampa Bay Mortgage Source - Tampa, FL
Tampa, Florida Mortgage

Renee, great questions!  Here are your answers:

1.  We can go up to 90% CLTV on this loan.  Your best option, to take full advantage of the tool, is to refinance your outstanding debts.  With this program and assuming you have positive cash flow, you can pay off that debt much faster through the program (my advice is to run your scenario through the SIMULATOR to see what works for you...www.amerifirsthoa.com)

2.  The interest rate is based on the 1-month LIBOR plus a margin determined at qualification.  It is really more about the full interest that you will pay back (again I refer you to the simulator).  Picture having two signs you can put in your yard...one that says "I paid 6% APR and $450,000 in interest" or one that says "I paid 8% APR and $150,000 in interest"...which would you rather have?  This is a tool to PAY OFF YOUR MORTGAGE, it is a liability management tool.  It is not designed to give you the lowest payment possible like a 40 or 50 year mortgage.

3.  What's in it for me?  If you qualify for this program and your cash flow works for the program, you will LOVE IT!  You will pay off your mortgage faster than you can imagine, have a great liability management tool and tell everyone about it.  Your referrals and advocacy are in it for me!

I am going to address this in my next comment to Tom Burris, but I will state again...THIS IS NOT FOR EVERYONE.  To qualify you have to have good equity, good credit and most importantly positive cash flow.  I only offer this product to the people it fits.

Apr 25, 2007 02:48 PM
Leah Ross
Your Tampa Bay Mortgage Source - Tampa, FL
Tampa, Florida Mortgage
Tom, you are right in that it can be a "scary" tool in the WRONG HANDS!  This product is only for a small percentage of the population.  But for those that qualify and the numbers work, it is AMAZING!  It is all about understanding the tool and how it can work for you.  Yes, it can be bad for some people, that is why we don't put those consumers in the product.  Our goal is to use this loan as a "specialty product" for the RIGHT consumers.  I was also skeptical at first, as I was of the Option ARM programs, but after seeing it work for hundreds of customers, I am a believer!
Apr 25, 2007 02:51 PM
Katrina Madewell
Charles Rutenberg Rlty- More than 5,000 agents(813) 777-1196 - Tampa, FL
Tampa FL Homes for sale | Tampa Bay - (813) 777-1196

Don't care for the Option arm's negative amortization loans, pick a payment, whatever jazzy name people have conjured up this week, but this homeownership accelerator program is a FANTASTIC loan option for financially-smart, money savvy, people.

I would encourage anyone looking for more information on this loan program to contact you because its a good loan and we know you'll only recommend it to the right folks.

May 15, 2007 04:37 PM
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Leah.....    I see that you didn't answer Tom's question, if it is a 1 month arm.

On another note, I will say this, I am impressed, because you have been the first person that I saw that has talked about this program in depth. And the first person to say that this loan is for the few. I have seen everyone else just praise this loan, but not in detail nor telling people that this only works best for those that have a true handle on their finances. 

I am still not a firm believer, especially if it is tied to a 1 month arm.  2nd, this is definitely not for someone that lives pay check to pay check, right?

In any case, KUDOS to a great explanation of this product.

                                                                                                              jeff belonger

Jun 15, 2007 12:07 AM
Renee Kokoszka
Citizens First Financial - Park City, UT
I am curious - seems like there are several programs like this out on the market,  is this one better than another?  What would be the features I should look for in a comparison with another company offering the same tool?
Jun 22, 2007 03:48 AM
Tina Smith
Metro Brokers/GMAC Real Estate - Lawrenceville, GA
Thanks Leah, I will take a closer look at this program.
Jun 22, 2007 02:19 PM
Leah Ross
Your Tampa Bay Mortgage Source - Tampa, FL
Tampa, Florida Mortgage

Jeff, thanks so much for the comment and perspective.  This loan program is tied to the LIBOR ARM and yes, it does adjust.  And because of this, yes, this loan is NOT for EVERYONE.  My first qualification is positive monthly cash flow, it will not be for a customer living paycheck to paycheck.  The key to this loan is liability mangement.  Just as someone trust a financial advisor to manage their assets, this is a tool for those that are financially responsible to manage their liabilities.  Because there is so much money saved in interest paid, the adjustable ARM will not be a factor for the finacially savvy.  Thank you for the comment and the support!

Renee, great question!  There is really only ONE program like this.   There are many other programs out their that can offer similar results, although the process behind it isn't the same.  Now, you will find other companies that offer this same product, but the loan officer offering the program has to be certified in order to write the loan.  Your best bet is to talk to two or three people that offer the program and go with the one that you feel understand the program the best and has the most experience.  Perhaps you can even find out if they have customers willing to share their experience in the program so far.

Treci, thanks for the comment!

Jun 24, 2007 12:43 PM
jimmy a
Homeowner - Honolulu, HI

Leah

 Can you tell me if this loan adjusts downward wth the LIBOR?

Jun 28, 2007 03:00 PM
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation
Hi, Leah - I'm citing this post in my blog tomorrow, and I hope you'll weigh in with a comment.  Sorry I missed it when you first posted the info.
Jul 31, 2007 12:09 PM