V. 20 - MANCHESTER HERALD. Thursday. Muy 31. 1HH4 Take on adjustable-rate mortgages cautiously Reagan Was to Ireland Take to the wilds Go to Vermont, You, a potential home buyer, are in a new phase of all over before you go ahead with an ARM. Mae, recommends you also find out what the margin uncertainty and deep confusion as interest rates again ' • What is the initial rate and monthly payment? is on the loan and the total of closing points. to an uncertain welcome and take kids, too not Switzerland stumble upward and increasing numbers of you take How long will each stay constant? The Federal Home Loan Bank Board ha$ on adjustable-rate mortgages (ARM s). Your • Will rate changes and payment changes occur at est^lished disclosure rules for adjustables designed The trend toward ARMs is accelerating; this type of the same time? If "no,” ask whether the lag could to help you learn what you need to know. Lenders muat ... page 4 ... page 11 page 18 mortgage accounted for an astounding 60 percent of M oney's mean negative amortization. obey them; ask and learn, for these are complicated new mortgages in April. Yet, you as a borrower • Is there a ceiling on the interest rate over the life instruments. simply do not have enough information in many cases W orth of the loan? How about a cap on monthlyjpayments? If Take your time to understand them fully before you- there is a ceiling on interest, what would be your to make a wise choice in this highly competitive, Sylvia Porter choose. maximum monthly payment? confusing market. Money book now avattable The rate on adjustables with ceilings on the amount • What index is used to make the adjustment? of interest that can be charged rose to an average of Federal regulations stipulate this must be beyond the "Sylvia Porter’s New Money Book for the 80s,” 1,328 11.9 percent in April against 11.7 percent in March. control of the lender and readily verifiable to you, the pages of down-to-earth advice on personal money For adjustables without caps, the average rate consumer must use a participating lender. borrower. Look at the recent history of the index your management, is now availabie through her column. Clear tonight; Manchester, Conn. The Federal National Mortgage Association lender uses and find out how volatile it has been. Send $9.95 plus $1 for mailing and handling to “ Sylvia climbed to 12.4 percent in April against a 12.2 percent Sunny Saturday Friday, June 1, 1984 average charged in both March and February. (Fannie Mae) has a similar program. Ask your • How will you be notified of changes in the rate Porter’s New Money Book for the 80s,” in care of the The changes may seem small — but this is by no potential lenders if they are aware of the plans and if payment? Regulations provide that you must be Manchester Herald, 4400 Johnson Drive, Fairway. — See page 2 Single copy; 25<t means the full story. To entice you, a home buyer, they are participants. This is important. notified at least 30 days, but not more than 120 days Kan. 66205. Make checks payable to Universal Press fianrhpHtPr Mmih many lenders have adopted deeply discounted rates The difference in the rates between ARMs and fixed before the change occurs. Syndicate. ? on the first year of adjustable mortgages. But these rates helps home buyers qualify for mortgages, • Charlotte Sterling, a spokeswoman for Fannie introductory, promotional rates — sometimes as low according to Freddie Mae. as 7 percent or 8 percent — are among the most For instance, the difference between a fixed rate at ROBERT J. SMITH, Inc. alarming developments. 13.5percent and a one-year adjustable at 11.25 percent After the first adjustment period, some observers would qualify 5.5 million more households, one survey MSIMIISmn SKE predict much higher rates — leading inexorably to shows. Monthly payments would be roughly $730 for major increases in monthly mortgage payments that the fixed rate and $634 for the ARM until the first 191* many consumers won't be able to afford. The adjustment. inevitable result: higher rates of delinquencies in the And that’s the heart of the problem with ARMs. River neam highest ievei in 50 years next couple of years. "Go in with your eyes open,” urges Allan Friedman, To help consumers, a few existing programs permit a spokesman for the U.S. League of Savings SERVMG AMERICA 649-5241 borrowers to convert an adjustable — to a fixed-rate Institutions. "Shop around with a lot of different FR O M 'm E mortgage at the first adjustment period. The Federal lenders and ask about the different ARMs each offers. BEGINNING! 65 E. Cnntnr StrMt Home Loan Mortgage Corp. (Freddie Mae) co­ There is no standard product.” Specifically, be sure ManchMtnr. Ct. Hundreds evacuated; sponsors this type of program. To elect it, the you understand the following points and then think it damage is in miiiions By Ruth Youngblood United Press International BUSINESS Related stories The formidable Connecticut River headed towards its highest level in 50 and pictures years today, forcing hundreds of people on pages 2 and 7 from their homes, causing millions of Move to high tech dollars in damage and prompting a state of emergency in case the worst is yet to come. an orderly cleanup and the possibility aRossmnrt's Although weather forecasters pre­ of federal funds to help victims. l^rompted Lydall Inc. R n ( 5 5 e v R n s p r o d u c t s . c o m p R n v dicted partly sunny conditions, more Red Crossicials predicted more than four days of heavy rains left the residents will evacuate with the Connecticut Riyer at 30.3 feet in Conneticut River creeping up. The Hartford, expected to crest later today hurricane of 1955 left 100 people dead to sell divisioh at 31, higher than the 30.6 peak reached and caused $500 million damage. during the devastating 1955 flood. ” It didn’t look that bad. of course, By Kathy Garmus Grady said that although the negotia­ Build a Pressure Treated No serious injuries were attributed to from jhe air. I ’m sure if you’re down Herold Reporter tions are in a preliminary stage, he the flooding, but the rains caused an there on the ground or if you’re in one of thought it was "very likely” that lydall estimated $12 million in damage to the homes that’s inundated with water Lydall Inc. wants to sell its Lydall & & Foulds could stand on its own, newly planted farmlands and crippled it doesn’t look the same way,” O’Neill Foulds Division, a paperboard manu­ without the parent company. several wastewater treatment plants said. facturer located in M.inchesler. be­ "The company wants to sell it and along the Connecticut River, sending ’’There was an awful lot of wides­ cause it does not fit in with the keep it as a going business,” Grady raw sewage into the water. pread flooding as we flew up and down company’s move toward manufactur­ said. "Their objective is not to put 8 x12’ DECK $18400 At least 700 people had been evacu­ the Connecticut River ... there were a ing high-technology products, accord­ people out of work." ated from their homes throughout the number of buildings that are at this ing to company President Millard H. Grady said that if the division is sold, state. time surrounded by water,” he said. Pryor Jr. some changes will be made. But he National Guardsmen manned barri­ While the National Weather Service "We are trying to emphasize a declined to elaborate on those changes, UPI photo cades and tried to straighten out issued flood warnings for the entire number of fairly advanced technolo­ saying that it was too early to massive traffic jams in Middletown., state, residents carrying their belong­ gies," Pryor said. "Paperboard does speculate. surrounded by water with all major ings .streamed into shelters, hopeful After four days of heavy rain, the Connecticut River Hartford, a crest of 31 feet was expected. Hartford is damage would be minimized by not fit that. It’s a mature market where "1 don’t want people to be nervous — Special Purchase roads closed. is heading toward its highest ievei in 50 years. At protected by a 35-foot-high dike. multi-million-dollar flood control pro­ everybody is doing the same thing, there’s no reason to be," he said. guM n Although Gov. William A. O ’Neill basically." The division employs about 78 SECmunLMHT declared a state of emergency Thurs­ jects in the last three decades. Unlike risky ventures that involve people. 15 percent of whom are 300 watt quartz halogen beam day night, Middletown Mayor Sebas­ Weather officials predicted the intensive research and high profit involved in management, Grady said. Reg 35.99 tian Garafalo said he proclaimed an highest river levels in three decades, margins, the paperboard industry The Lydall & Foulds mill, located at additional state of emergency for the and mayors of cities along the Manchester returns to normal devastated community. tumultous Connecticut River declared requires little research and has low 615 Parker St,, was founded in 1879 and profit margins. Pryor said. was the original operation for Lydall, The flooding has created "some state of emergencies to cope with the Lydall announced on Tuesday that Pryor said. The division manufactures Manchester and surrounding towns were The only Manchester road to be closed by clay has washed off the town baseball field massive traffic jams,” Garafalo said.