2(1— MANC'HKSTKK IIKHAI.I), MoiuliiN, Juno II. I!IB4 BUSINESS Ifs time for police Barbie Inventor Pentagon halls ARMS confusing, so shop with utmost care to get written rules has his doubts missile testing ... Editorial, page 6 ... page 11 ... page 9 So rapid and widespread has been the American a rise of 18 percent over the first year, calculates the unlikely — buf it sharpens the comparison: consumer's rush for adjustable-rate mortgages that^ • Federal National Mortgage Association (Fannie That $60,000 mortgage at 12.5 percent interest costs in some localities, only a few lenders still offer the M ae). ^ $640 a month, for total interest charges of $170,000 on a conventional fixed-rate mortgages with which most of Your ' • A second key point that you often overlook is the 30-year loan. At 13.5 percent, monthly payments cost us grew up. In startling contrast, just about every margin charged by lenders on an ARM. The margin is $687, and total interest comes to $187,320. That $47 lender everywhere offers at least one — and usually Money's the difference between the index used to determine difference per month adds up to $16,920 over the several — kinds of adjustable-rate mortgages, or the interest rate charged for the loan and the actual mortgage’s life. Manchester, Conn. ARMS. ^ Worth rate that you, the borrower, pay, and it includes the ARMs equipped with consumer-protection features ' Pleasant tonight; Tuesday, June 12, 1984 No longer can any responsible financial reporter Sylvia Porter lender’s business costs and profit. such as interest-rate ceilings for each adjustment Humid again Wednesday dismiss ARMs as a temporary phenomenon. They As a rule, the margin is built into the rate that your period and interest-rate caps over the life of the loan Single copy: 25<P apparently are here to stay, no matter how confusing lender quotes for the first year of the mortgage. will cost you more than loans without them but the — See page 2 you find them — no matter that there is no CAUTION: Ask what the margin will be in the second ceilings are worth every cent. standardized, industrywide product against which to year, and all subsequent years, of the loan. Fannie Mae has a new brochure, “ Consumer Guide lianrhrBtpr IpralJi compare what you are offered. To illustrate, if you’re a typical borrower, you often For instance, suppose you are comparing the two to Adjustable Rate Mortgages.” It’s free. Get it! If you find shopping for ARMs overwhelming, you don’t realize what even a small increase in the interest ARMs offered by different lenders. ’The mortgages Write P.O. Box 23867, Baltimore, Md. 21202. You are in have plenty of company (although that’s scant rate will do to your monthly payments and how that look identical but for this point: Lender A tells you a jungle here. You need all the help you are offered. comfort). The following may help you: can cripple your family budget. Sure — you can that after the first year, the interest rate on the • Most essential among the points for you to grasp qualify now for an ARM, but will you be able to handle mortgage will be determined by adding 2 percent to are how high the interest rate can go and what will the payments when your costs go up? the Treasury index (many lenders use this index to Money book now available happen to your monthly interest payments in the most Consider a $60,000 mortgage at an introductory rate determine rate adjustments). Meanwhile Lender B "Sylvia Porter’sNew Money Book fpr the 80s,” 1,328 Weiss backs Court ruling extreme instances. Not truly important at all are the of 12.5 percent. First-year monthly payrnents are tells you that the rate will be determined by adding 3 pages of down-to-earth advice on personal money points usually emphasized, the introductory rate on $640. Say that in the second year, the interest rate percent to the same index. That 2 percent ^r 3 percent management, is now available through her column. an ARM and the corresponding monthly payment. climbs to 14.5 percent (an increase of 2 percentage is the margin, and over the lifetime of the loan, the Send $9.95 plus $1 for mailing and handling to “ Sylvia "Prepare for the worst,” says Allan Friedman, a points). Now, your monthly payments are $734, or a extra 1 percent charged by Lender B can cost you Porter’s New Money Book for the 80s,” in care of the electric plant spokesman for the U.S. League of Savings Institu­ bo(>st of $94 a month. And if interest rates in the second thousands. Manchester Herald, 4400 Johnson Drive, Fairway, tions. "That way, you won’t be stuck by surprises year rise to 15 percent, or an increase of 2.5 In the example below, the interest rate remains Kan. 66205. Make checks payable to Universal Press protects cities’ later on.” percentage ^ints, monthly paymentsjumpto$756, or constant throughout the life of the mortgage — Syndicate. partnership A big business By Alex Girelll Business Herald Reporter seniority plans In Brief Companies hungry An agreement with a private corporation for developing an electricity generating plant at Union ployee laid off to make room for him. Bv Elizabeth Olson Turkington back to radio Pond Dam has been recommended to the town by He may have to wait until a vacancy General Manager Robert B. Weiss. United Press International Bill Turkington. a native of Manchester and a for demographics occurs,” White wrote. The^artnership is one of two possible methods of In dissent. Justice Harry Blackmun 1961 graduate of Manchester High School, has WASHINGTON - The Supreme developing the hydroelectric facility to be discussed wrote that lower courts "are unanim­ joiited the staff of Court today ruled 6-3 that cities forced by the Board of Directors at a workshop tonight. ously of the view that race-conscious radio station KJOI- to eliminate jobs because of money • Nearly 17 million mothers in the remedies” are not prohibited by FM in Beverly Hills, By Dennis C. MllewskI The other would be for the town to develop the plant problems cannot lay off veteran white United Press International United States, or 56 percent, have jobs federal bias law. Justices William Calif. on its own and assume all the risks involved. workers to keep newly hired minorities outside the home. Brennan and Thurgood Marshall The evening host Under the best possible conditions, the town would on the payroll. STAMFORD — A thie cross-section Donnelley employs experts in fields joined in the dissent. of music and news. make about $50,000 more in discounted dollars over a The key civil rights ruling affects of the country can be found in a I'A-mile ranging from sociology and economics Traditionally, white workers were Turkington works 15-year period by tackling the job alone. Under the cities across the country that are being radius of the White House, but to cartology and demographics to sort protected by .seniority — security for the No. 3 radio forced to lay off police, firefighters and merchants and advertisers are better and help place the glut of numbers worst conditions it would lose $140,000 in discounted accrued by years in the job — until station in Los An­ other workers because of shrinking off target young, mobile professionals intoproper perspective. dollars. courts in Boston and Memphis ruled - geles, according to revenues. with children in Marietta, Ga. The process takes expertise, intui­ Discounted dollars are dollars adjusted for that layoffs based on seniority would Arbitron ratings. Writing for the majority. Justice Donnelley Marketing Information tion and plain old common sense. Wood inflation, risk of possible losses, and loss of freedom to end any gains by newly hired blacks. "K -JO Y” , as it is Byron White said the court was Services uses telephone directories, said. Blacks and other minorities histori­ cailed, is aiso one of invest them while they are tied up. The discount rate re-emphasizing its previous rulings ' auto registrations and the U.S. Census Why are mothers more likely to have cally had been excluded from such the strongest sta­ used in Weiss’s report to the directors is 11 percent. that federal discrimination law "pro­ to provide such information for clients jobs in the Carolinas, Georgia and New public safety jobs. Civil rights and tions in southern In partnership with Catalyst Energy Development tects bona fide seniority systems.” ranging from muffler shops to the Hampshire? Because textile mills in women’s groups argued the case is California, with a Corp., Weiss says, the town would get $26,136 in 15 " I t is inappropriate to deny an nation’s largest retailers. the South traditionally hired women, as central to preserving minority gains in power output of years in discounted dollars under the worst conditions innocent employee the benefits of his They still want to know how much do electronics firms in New the work force. 105,000 watts, and seniority in order to provide a remedy customers are likely to spend, what Hampshire. and $73,237 under the best. "Unless the last-hired, first-fired an estimated au­ in the pattern of practice (of discrimi­ they will buy and when they will " I t ’s a lot easier to sell a Mercedes- In no year would it have a deficit if the project was policy is discredited,. minorities and dience of more than nation) suit such as this.” he wrote. purchase. Benz here (in affluent Fairfield conducted in concert with a developer.