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Show A-18 77e Park Record Wednesday, January 5, 2000 Talking Shop Home equity loans: what you need to know by Ronald Field RECORD GUEST WRITER Build a fence or add a room, put in a pool or add a deck, redo the kitchen or your drafty windows... win-dows... heat things up with a new furnace or chill out with new insulation insu-lation in your attic. Let your imagination imag-ination go. Whether your goal is to fix up your home, pay off your bills, or simply gain a line of credit secured by your home, it's your home and your dream and you can make those dreams come true with a home equity loan. More and more lenders are offering home equity lines of credit. cred-it. By using the equity in your home, you may qualify for a sizeable size-able amount of credit, available for use when and how you please, at an interest rate that is relatively low. Furthermore, under the tax law (depending upon your specific situation), sit-uation), you may be allowed to deduct the interest because the debt is secured by your home. A home equity line is a form of credit in which your home serves as collateral Because a home is Are e-bills the next step? Continued from A-17 tion. "It might cause confusion among our customers." Huh? With the modern miracle of computing, the Internet, electronic elec-tronic funds transfers, et a., and CheckFree cannot figure a way to make this simple yes-no modification modifica-tion work? Something like new payees default to one week delivery deliv-ery of payment until they are established with an electronic account. The software can say "yea" or '"nay." and tell the customer cus-tomer on their PCs screen. Seems to me that a little competition here would be a good thing... And here's an irony: I was stationed sta-tioned in Germany when I first began using CheckFree. In that country, one can pay a utility bill or send money to a company anywhere any-where in Europe by dropping in at the local post office or any bank. Turn over the cash and a deposit- TD0 POCC'J 0 CUStCD CI 000CIC2CI CCCtO, DEndlnoc, oad clllo, orociaoo tto cghIzzd trcaofor ol CDcre iron tDo cMcr lo Co zzzu ;. ' ' cueilcSib tzdj. v . TD0 D0D01 0 CU3IC3 TCo clHzista QOt 1 Cf IC33 tzczj. "f '.' fir y Jfr'tr . likely to be a consumer largest asset, many homeowners use their credit lines only for major items such as education, home imi rove-ments rove-ments or medical bills, and not for day-to-day expenses. With a home equity line you will be approved for a specific amount of credit your credit limit is the maximum amount you can borrow at any one time while you have the plan. Many lenders set the credit limit on a home equity line by taking tak-ing a percentage (say. 75 percent) of the appraised value of the home and subtracting the balance owed on ihe existing mortgage. In determining deter-mining your actual credit line, the lender will also consider your ability abil-ity to repay by looking at your income, debts and other financial obligations, as well as your credit history. Home equity plans often set a fixed time during which you can borrow money, such as 10 years. When this period is up, the plan may allow you to renew the credit line. In a plan that does not allow slip-looking piece of paper with the payee's information to the clerk, and the recipient gets their money and payment confirmation that business day. It's the law. Wouldn't it be great if you could receive and pay all your bills and bank statements electronically? E-bills E-bills ("electronic bill presentment and payment" in bank-speak) or online bill presentment, holds that promise. You can if you live in Germany, and you would have been able to do so for more than a decade now. Think of ail the trees saved, the stamps not licked (or peeled and stuck), the trips not made by the postal service, and so forth. Seems like businesses would be jumping on this one in droves... Then why do only 39 participating companies show up on CheckFree's e-bill list ? This seems like a heckuva big opportunity for someone. Just food for thought. 0 W r '.iii'ii'iiMiiii li 7 Pcucr 0 TcsDoclcou renewals, you will not be able to borrow additional money once the time period has expired. Some plans may call for a payment in full on any outstanding balance. Others may permit you to repay over a fixed time. Once approved for the home equity line, usually you will be able to borrow up to your credit limit whenever you want. Typically, you will be able to draw on your line by using special checks. Under some plans, borrowers can use a credit card or other means to borrow money and make purchases using the line. However, there may be limitations on how you use the line. Some plans may require you to borrow a minimum amount each time you draw on the line (for example, $300) and to keep a minimum amount outstanding. out-standing. Some lenders may also require that you take an initial advance when you first set up the line. Home equity plans typically involve variable interest rates rather than fixed rates. A variable rate must be based on a publicly available index (such as the prime rate or U.S. Treasury Bill rate). The interest rate will change, mirroring fluctuations in the index. To figure the interest rate that you will pay, most lenders add a margin, such as two percent-points, percent-points, to the index value. Because the cost of borrowing is tied directly to the index rate, it is important to find out what the index and margin the lender uses, how often the index changes, and Local coavention properties have reported that the following groups will meet during the week of Jan. 9 - 15 in Park City. Information is supplied by the Park City ChamberBureau. Groups Attendees Groups Attendees Blair McGill & Hill 40 YPO Printers Forum 25 EG&G Wallace 90 Coca-Cola 20 Rocky Mtn. Ski Club 60 Lloyds BBQ 23 Sundance Institute 500 Gary 's Ski Tours 30 VA Healthcare 45 Perficient Software 65 Airtouch Paging 25 Envirocare 100 Ovid Technology 20 Deer Valley Resort 20 Huntsman chemical 200 Guidant Corp. 16 Novartis Pharmaceuticals .15 Maritz Travel 200 Buyer United 50 Monitor Distributors 50 Deutsche Bank 40 Clinical Research Assn. 15 AAAA Emerald Forum 10 Crossroads FAM Tour 17 Merrill Lynch 50 Total 1.726 This is 44 percent of the total from the same week last year. EIIPEH78 DU CCCCluZCl how high it has risen in the past. Sometimes lenders advertise a temporarily discounted rate for" home equity lines a rate that is usually low and often lasts only for an introductory period, such as three to six months. Variable rate plans secured by a dwelling must have a ceiling (or cap) on how high your interest rate can climb over the life of the plan. Some variable rate plans limit how much your payment may increase and how low your interest rate may fall if interest rates drop. If you are considering a home equity line of credit, you also might w ant to consider a more traditional tra-ditional second mortgage loan instead1 of a home equity line. Second mortgage loans have a fixed rate and a fixed repayment period. Whatever your mortgage financing needs, your professional mortgage lender is available to answer your questions. Based on the lenders surveyed this week, the interest rate on 30-year 30-year mortgages increased to 8.000 percent The interest rate for 15-year mortgages is 7.750 percent, and the rate for one-year adjustable-rate mortgages is 6. 750 percent All rates are quoted with zero points and a one-percent origination fee. Ronald Field, Park City, is a licensed mortgage broker, investment invest-ment advisor and former columnist for the Chicago Tribune, Readers with questions can send their letters to Ronald Field, P.O. Box 2060, Park Citv, UT 84060. D 0 0 G diiipflpjiiDOBiitiir Manj & fpant SUem anJ the Egyptian Tkcafpe Company invite (jcu lo a wonJepful evening of CaLpct Entertainment Januartj 15,2000 7:30 Dm Hie Man) G. Slcinep Eqijplian Tiea!re 338 Main Sfpeef, Rarl . Lj cc?!:x) (jtjlian Usealrc Ccqxrs Bex Office al 649-9371 Program Rltt hrfntt Bank of Utah 30 yr Fk 30 yr FHAVA 15yrFix 8.125 8.250 .7.750 Commonwealth United Mortgage 30 yr Jumbo 8.125 0 15yrFix , 7.750 0 31 yr ARM 7.500 0 First Union Home Equity Corp. Second Mortgages Line of Credit Prime1 .0 15 yr Fa 10.500 0 First Community Bank Conforming Loans 30yrFix 8.250 0 15yrFix 8.000 0 tntermountain Mortgage 30yrFix 8.000 .0 15yrFix . . 7.625 0 51 yr ARM 7.250 0 Mountain Express Mortgage 30 yr Fix 7.875 0 31 ARM 7.250 0 1 yr ARM 6.500 f Park City Bank (Drv. Of Draper Bank ft 30yrF 15yrFix 30 yr Jumbo 8.125 7.625 8.500 0 0 0 U.S. Bank of Utah 30 yr Fix 8.125 15yrFix 7.625 1 yr ARM 7250 Utah Housing Finance Agency 30 yr FHAVA 6.790 30 yr FHAVA 7.090 Washington Federal Savings 30yrF 8.125 0 30 yr Jumbo 8.250 0 15yrF 7.875 0 The Utah Mortgage Pulse includes up-to-date information on home loan rates charged by Salt Lake City area lenders. The information was accurate on Monday, January 3, but is subject to change without notice. Closing points: One point equals 1 percent of the loan amount Most lenders also require private mortgage insurance with down payments of less than 20 percent. Abo, most lenders charge loan processing fees up to $300, credit and appraisal fees up to $400, origination fees of 1 along with other closing costs. Index: T-&8 x Yield on 1 yr T-fti. COFI District Cost of Funds, LIBOR London Source: Mountain Express Mortgage 7 IP 5 5 5 5 5 5 26 " T-BM NA NA Trust) 10 10 5 5 5 2 T-ai 5 5 5 26 t-b.ii 5 5 5 5 5 10 26 T-Bil 3-5 3-5 5 5 10 16 T-8 Cost of Funds Index. 11th D : InterBank Offered Rate. (435) 647-3700 11th ml 3 (LP (carar |