mortage counselors - I need some advice

Just bought a home and we want to take a line of credit to fix it up. Our mortgage broker says he can't get us that much because since the house is less than a year old, they use the purchase price instead of the appraisal price. He said try in January.

In the mail we get an offer from Ameriquest. They call and basically they say they can get the money, but the way they do it is not a line of credit. Basically I think they refinance and become the primary lender.

Does this sound fishy to you?

Re: mortage counselors - I need some advice

That exactly how they do it - they'll refinance you. It may or may not be the best option for you, but its not "fishy".

If you have a good rate now (which I'm guessing you do since its a recent purchase), don't refi - you'll wind up paying a lot in closing costs.

Try another bank, and see if you can get a line of credit or home equity loan.

When did you purchase? Was it more than 6 months ago? Did your purchase price reflect the market at the time you closed?

Re: mortage counselors - I need some advice

Also....try a bank that does 100% LTV (loan to value)....I know citibank does this and maybe BOA also. The interest rate may be a little higher than a traditional line of credit where it's only 80% LTV....but you will get your money and the interest is tax deductible anyway. Depending on how much you need to take out....whatever you put as your downpayment is automatically equity that you could borrow. For example....lets say you put down 10% and that was 40K (on a 400,000 house), you should be able to borrow a minimum of 40K to do you fixing up.

Hope that helps.

Re: mortage counselors - I need some advice

Thanks! I'll tell my DH!