What if you could get one home loan and never had to get another?

That’s the idea behind a brand new mortgage called the Home Asset Management Account, from Wells Fargo, the nation’s largest retail mortgage and home equity lender.

The new loan combines a mortgage and home equity line of credit, as well as other features into a single account that can be used to manage cash flow, gain potential tax advantages, plan for major expenses, and invest for the future.

So you’d get two loans – a first mortgage and a home equity line of credit – at the same time. As your home increases in value, and you pay down the loan balance, you could tap into the available equity at any time.

“For most families, the home is not only their haven, it is their largest source of wealth,” said Pete Wissinger, president and chief executive officer of Wells Fargo Home Mortgage. “Homeowners want to access and control this investment just like their other investments.”

“With Home Asset Management Account, they can manage the equity in their home as they would any other important asset,” he added.

Unlike a traditional mortgage, which is set at a fixed amount and then resold on the secondary market, the Home Asset Management Account would be the only loan you would need as long as you owned your home.

If you need more cash, and your home had enough equity, your single loan would expand to encompass the new home equity loan. You would not need to complete a second loan application, wait for another approval, or pay a second application fee.

The account would provide owners with quarterly and annual reports that track the changes in your home equity and provide an indexed value of your home. Monthly statements track your mortgage payments.

Your credit line increases quarterly, as you pay down your mortgage and your home increases in value. Homeowners would have the option of converting variable rate lines of credit to fixed-rate mortgages when rates are attractive.

Homeowners could access their equity by writing a check, using an electronic access card, using the telephone to transfer cash to another bank account or visiting a Wells Fargo store.

“We conducted extensive research and found that consumers don’t always think of the equity in their home as their money to use as they see fit,” said Doreen Woo Ho, president of Wells Fargo’s Consumer Credit Group.

The idea of a single mortgage for life has been floating around the mortgage community for years. Several years ago, one mortgage professional discussed the idea of having the same mortgage follow a homeowner from house to house.

So if you sold your home and bought another one on the same day, the loan would simply be transferred over, with the new property acting as collateral for the existing mortgage.

This new development doesn’t go quite that far. It essentially is giving homeowners a first mortgage and home equity loan together, which other lenders have done. And, the monthly, quarterly and annual statements are designed to keep you wanting to tap into more of that growing home equity.

The only problem with having a single account to manage all of your home loans is that a homeowner might simply stop shopping around for the best mortgage deal.

With a program like Wells Fargo Home Asset Management Account, it’ll be easy to simply call their toll free number and get additional cash out of your property. Wells Fargo figures homeowners will be willing to stay with the company simply because it will be easier than finding out what other lenders are offering.

In fact, the company is banking on it.

Published: Sep 23, 2002