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Show Page 8A Lakeside Review Thursday , September 1 1 , 1980 Uncertain Market Depresses Local Housing, Loan Businesses LAYTON Forecasts for the future of the housing industry in the lakeside community and throughout the state dont look too bright, at least for the next six months or so, according to a representative for a Layton savings and loan institution. Robert Bush, mortgage loan representative for American Savings, said home loans are becoming scarce because of high interest rates and a reluctance on the part of home buyers to make the move into a first home or a larger home because of an uncertain economy. A brief period of increased activity in home sales was reported during July when interest rates plunged after reaching record heights in April, Bush said. But a move by the nations largest banks to boost their prime rates back up to the 12 percent range has slowed sales again. Prime interest rates are those charged by major banks to their most creditworthy customers. Bush said down the points charged on government loans. Points are a charge to the seller of a home when a buyer is financing a mortgage through FHA or VA. The purpose of points, Bush said, is to make the loan salable to an insurance company or other buyer. If a bank or savings and loan cant Prime rate and mortgage interest are not realh tied together. The prime sell loans, they sit on our shelves and reached 20 percent a few months ago, pretty soon were out of business, but mortgage interest never got over Bush said. Loan buyers would rather buy con14. Currently, the prime is about 12 ventional loans because the higher percent at most major banks. Con- interest rate yields a better return so ventional home mortgages are going the money received by charging points for about 13- - percent and FHA and VA is offered to the loan buyer to help offset that difference. loans are at about 12 percent. Bush said many lending institutions Local home mortgage interest rates got as low as 11 in July, Bush said. are not quoting fixed points or interest Government-insured loans through rates, because of the rapid movement the Federal Housing Administration recently in both areas. If we took a loan application at 12 and Veterans Administration recently went from 11.5 percent to 12 percent, percent, the going rate might be 14 but Bush said most realtors felt those percent by the time we got all the forms rates should have gone higher to bring and documents filled out and local banks and other lending institutions are not directly affected by prime rates, but trends up or down in the prime often spark the same type of movement in mortgage rates. There are maybe only one or two borrowers in the entire state who get the prime interest rate, he said, , .... mm fi he said. commercial loans. Bush said, many lenders are quoting 2 percent above prime. He said the same type of floating interest may be adopted for mortgage loans if the erratic trend of the past year continues. He said many types of flexible interest rates are being considered or adopted by lenders. One FHA graduated payment plan originated several years ago but only recently gaining acceptance is the 245 program. Most lenders are using plan number 3 under that program, Bush said, which allows the interest rate to be increased 7 percent per year for the first five years. At the end of the period, the loan balance is higher than processed, On five-ye- on and only Bush said. customers homes, federal government can do much about the present situation, he said. The government can do much to control the Federal Reserve Boards discount rate, he explained, which could ease the money situation somewhat,. pre-sol- d with homes In some instances, finished months ago and not sold, lenders have been giving the builder a long-terloan and the builder then sells the home on a contract which he carries himself. Indications for the near future are very uncertain, Bush said. Many people think, because it is an election year, that interest rates will go down and things will ease up in the next few weeks, but I dont know that the ERS GY One thing that does seem fairly certain home prices will go up. Bush said builders have indicated to him they expect the price of lumber to nearly double by next spring as demand for housing picks up. MASTIC ar the original loan. The plan makes it easier for borrowers to qualify because of the lower initial monthly payments made possible by the lower interest rate. However, a larger down payment is required and the borrower pays a substantial amount more for the total loan. Another type of conventional graduated payment loan requires the borrower to pay for private mortgage of 1 insurance, which adds about rate. to interest the percent Bush said flexible interest, which may rise and fall throughout the life of the loan, is another possibility for lenders who are trying to find ways to cope with the current unstable market. Realtors are taking the attitude that theyll do whatever they can to avoid dealing with lending institutions, and that is hurting lenders, Bush said. He said some realtors are keeping sales up by arranging loan assumptions, contract sales and trades. Home builders have found it increasingly difficult to obtain construction loans, and home starts are remaining at a very low level, he said. Most lenders are only making construction loans to their established DDD09 REGISTER NOW!! Gymnastic Tumbling , Trampolines Platform Tumbling Acrobatics Tube Tumbling Boys Eligibility: Girls of All Ages Times vary according to Age and Ability Scheduling: N. Fairfield Rd. 192 ph. & or 766-22- 22 Layton 731-24- 55 Jfc J&Js... Home of the it WEEDS have grown up around this new home in Roy, waiting for a buyer in a slow real estate market. . GREENERY PROFESSIONALS Prospective home buyers are facing high interest rates as brokers try alternate methods of financing. Hi-Flie- rs Move to Layton JUNIPER : 8Sr Andorra k) msN0Rway zspruce 15 ; LAYTON Terry Ellis, manager of the tumbling team, has opened a tumbling and dance studio in the old Kowley Drug Store, 52 N. -- rs Main, Layton. -- BLUE SPRUCE off state .The tumbling champions for was .three years previously based in Roy at the Roy Recreation Complex. Mrs. Ellis new facility will offer tumbling and a babysitting service and a dance instruction, PRICES SUBJECT ONLY TO REMAINING STOCK. teaching preschool program. Performance Plus, as the studio is called, will ' . feature dance teacher Colleen Price Moore on evenings. Wednesday Mrs. Moore, the director of Dance World of Utah, formerly taught dance to the Osmond Family. Mrs. Ellis, who holds an international rating in judging, is executive secretary of the United LOCAL da WATERMELON $ Ea. LOCAL PEARS I Layton Pair Win Drawing ! LAYTON 15$1 i I lb YfflTni CTff" Association president of the Utah Associations PEPPERS COME AND SEE US FOR YOUR LOCAL PRODUCE AND CANNING NEEDS! States Tumbling and vice Tumbling anaLARGE LOCAL PEACHES C?ng AUTHORIZED RETAILER SUPER TURF PLUS 2 BUILDER Reg. $11.95 Two Layton residents were recent winners in the grand opening drawing at the Layton Hills Mall phone store. Evonne Moyes of 1669 N. 2125 W., Layton, won the first place prize of a SPREADER to San trip for twoWhen her Reg. $39.95 Francisco. husband was told of her winning the trip, he said, greart, ;Thats won never before. Rae House, also of received a Layton, Panosonic Video work. U produce weve anything Recorder as the second place winner. She was at ;work when told of her 'winning and came to pick up her prize right after $11 W Accept garden center Plenty of Mastercharge A VISA 1815 W. GENTILE, LAYTON, UTAH, HOURS; MON.-SA8:30 o.m. to 6 p.m. CLOSED 376-121- T. Free Parking 1 SUNDAY ' |
