I purchased my townhome in May 2004 in Northern Virginia.  I have an
80/20, with the 20 being a home equity line of credit for $66k.  The
80 is a 5 year ARM at 5.25%.  Both loans are interest only.  My home
equity line's interest rate is based on prime and, of course, has been
going up steadily over the past year or so.  Current APR is 8.03%.
I paid $330k for my home and they're currently selling for $475k.  I
have excellent, almost perfect credit.
So what are my options?  Is there a way to get another home equity
line at a cheaper APR, then paying off my existing loan?  Are there
interest-only home equity lines of credit out there with an interest
rate lower than 8.03%.  Are there other options out there besides a
HELC?  I don't want to pay mortgage insurance and I will need a loan
with no pre-payment penalties.  My current payment varies between $400
and $500 a month.  I wouldn't mind a non-interest-only loan, but would
like to keep the payments to a minimum.
Also, how much would closing costs/fees be?

A home equity loan is a loan that is backed by the equity in your home
(which you now have) as opposed to a home equity line of credit (which
is a low intrest credit card -low in terms of a credit card - that
puts your house as a backing for the credit card).  I would talk to
the bank (preferrable a different one that sold you this load of crud)
and see what they can offer.  I would get out of the line-of-credit
(credit card) deal.  I would lock into a fixed rate because the fed is
expected to continue with the 1/4 point rate hikes at least 1-2 more
times (and if energy (oil, gas, etc)) continue inflation will rise
forcing the fed's to continue to raise the fed rates.  The prime rate
is very tied to the fed rates.  The only difference is that the prime
rate market will try to estimate what the fed is going to do resulting
in sort of an "smoothing out" of the rates (more changes with smaller
jumps).  ie instead of one, 1/4 point instant jump in the fed rate.
the prime rate might make ten, 1/40 point jumps.

Your best bet may be to go to the bank where you keep your checking
and/or savings account and ask what their rates are for a home equity
LOAN (that's a fixed-rate product that almost always has an amortized
payment -- principal and interest every month.)  They may be able to
give you one with no closing costs.

Also, call the company with which you have your HELOC and ask them if
they have a fixed rate conversion option (this would allow you to
change your HELOC into a HELOAN for a modest fee; something like $95,
if they offer the option.)

Rates on fixed rate seconds are around 7.250% to 8.125% these days;
your best rates will be on balloon loans -- these are amortized over
30 years, so your payment is as low as it would be if you were going
to pay the loan off over 30 years, but they have a payoff requirement
("balloon") at the end of 10 or 15 years.

Your payment will not necessarily go down if you move from an interest
only loan like a HELOC to an amortized product.

Example:  
     Your current HELOC rate: 8.03%
     Your current payment on $66,000:  $441.65

     Hypothetical new HELOAN rate:  7.250%
     Your payment on $66,000 would be:  $450.24

So the benefit to you would be in the gut feeling of knowing your rate
will not increase.  In the end you just need to ask yourself "is it
worth the amount I'd have to pay in closing costs to know that my
payment won't increase?"

Sometimes the answer isn't something that the math can show you; it's a gut call.

More info see jordangraham*dot*com

Does the 330K you paid for your house represent the 80 portion of your
loan or the entire loan including HELOC? If it represents the entire
80/20 combination than your currently at a 70% loan-to-value. You
could get a new appraisal reflecting the 475K market value and
refinance, combining both loans into one, and eliminate the HELOC
entirely. If your interested in another HELOC you could refi using an
'70/10' w/ roughly 330K representing the 70 portion, and a 47K HELOC
representing the 10 portion. This would keep you under 80% LTV and
avoid PMI.