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Show Working people and the marketplace err eview Wednesday April 15, 1987 Line of credit LYNDIA GRAHAM Home equity line , LAYTON of credit loans may be one of the hottest consumer items financial institutions are currently selling, but, according to how they are used, they cn be a warm fire under a homeowners financial plan or something that could burn him badly. The key will be how the cond sumer handles the loan, according to Mark Hadley of First Security Bank in Layton. He said the loans are currently very popular and come under a variety of titles but amount to a line of credit with a fancy name secured by a home mortgage. Bruce Jensen of Community First Bank, (formerly Clearfield State Bank) said the loans have been around for a long time but have had an increasing emphasis since the changes in the tax laws. At most financial institutions a line of credit can be established up to 75 percent of the total market value of a home, less the remaining first mortgage. Interest on the loan may be deducted for tax purposes on amounts up to the original purchase price of the home plus the costs of improvements. Money borrowed above the purchase price plus improvements may get interest tax breaks if the funds borrowed are used for education, medical expenses, or home improvements. The catch, according to Jensen, is that no one knows for sure exactly how the IRS will interpret the new law or how they will monitor it. Be cautious if you are using this' type of borrowing only for tax purposes, he said. We just dont know how the tax information will be determined. Tax benefits or not, most bankers feel the line of credit is the best thing to come along since the credit card. Van Thornock, real estate manager of America First Credit Union,' said as far as private loan borrowers are concerned, this is the first major change in borrowing since the plastic cards came into common use. This type of borrowing is going to be popular for a long time in to the future, he said. We are comparing it to when credit cards first came out. Convenience to consumers is the prime reason bankers feel the loans will be so popular. A can go to his financial institution, apply for the line of credit, and possibly never have to apply for a loan again. Homeowners who bought houses several years ago and watched the value double or triple can benefit most from the loans since their borrowing power is greatest. For instance, a family who bought a home 5 or 20 years ago for $20,000 might find the home is now worth $80,000. They could possibly establish a line of credit for 75 percent of the current value which would be $60,000 less any existing first home-own- er 1 Because the loan is open-endea person with a large credit line d, could finance any types of purchases or needs over the course of many years. The lending institutions are now in the process of determining when they will review the credit lines. Default on payments would bring an automatic review. Some e , , , i ' , ' I '' , Women's group sets meeting for month - W w for a long time into the future. We are comparing it to when credit cards first came i -- ) (1 ; - $& j t?9 out Van Thornock, America First Credit Union feXAB .V JN-1 .V banks are leaving open the possibility of calling in updated financial statements on a regular basis and others can require a new home appraisal at the owners ex- 773-380- pense periodically. Most of the payback rates dont call in a large amount of principal for the first 10 years, according to Hadley, so he suggests borrowers temperature contest A spring fling' LAYTON contest from 107 FM KSOS in-Layton was won by Kathryn Ger- ber of Clinton. KSOS promotion director Tabb George presented the win- ner with a vacation for two to Orlando, Fla., in the How Hot Can It Get contest sponsored by KSOS and The Bon. Kathryn forecast the exact high temperature on the first day of spring at 44 degrees. Runners-u- p were John Nunley and Thomas Vergano, both of Layton. Nunley carted off $200 in mer- chandise of his choice from the Bon. Vergano won a ghetto, blaster" for his forecast. Set-u- -- to $500. Jensen said different banks are offering different approaches to the fees. Some charge the fees up front as one time costs. Others waive the fees but charge an annual fee to keep the account open. Some may include the setup fees in the first loan draw against the credit line. Hadley attributed the promotions and competition between banks to the fact that once a line of credit is established customers may not have the need to come back and apply for loans again. They will likely stay with the credit line for future borrowing so RUTH MALAN Lakeside Review correspondent IndoneFRUIT HEIGHTS sian art and the art of Chinese cooking have been brought to the area by restaurateur Frank Fukushima of Midvale. The Dragon Inn, located just off Highway 89 in Fruit Heights next to Cherry Hill Campground, is the fifth restaurant opened by the Chinese native. The other restaurants were all located in Califor- . WW fi M 'W JIM J iiiiiTr ilri Y'fihTtirfrriiTiiTii t Tirnflf' f ftrifBriVTfitr owner Frank Fukushima. Carvings in foreground are Indonesian art. Chinese restaurant open While the loans offer convenience for borrowers they can also offer disadvantages. Thornock called them a poten- y J Greeting customers at the new Dragon Inn in Fruit Heights is Elaine Fukushima, wife of fewer will change banks. day-to-da- j decorate the Oriental eating figures are place. The carved from sawo wood, a tropical wood native to Indonesia. Each figure weighs approximately 300 pounds. Because the Japanese took the majority of trees from the island of Indonesia, the wood is scarce, making the art collection more valuable and quite rare, said Fukushima. He has smaller carvings that will be put on display at a later date. nia. The Fukushima family spent After moving to Utah 12 years four for the Fukushima cooked years in Singapore where he ago, Salt Lake Hilton and Little Amer- - took cooking classes and his wife ica Hotel. He decided to go into taught at an American school. She is now teaching at Kerns Jubusiness for himself. a nior High. They are the parents was more of there Feeling need for a restaurant outside of of one son and one daughter. Because of the five different dithe Salt Lake area, he settled on Fruit Heights for his new endeav- alects in Singapore there are different styles of cooking, said or. d art from Indonesia Fukushima, who learned them Hand-carve- all. The restaurant is open Monday a.m. to 3 through Friday from p.m. and from 5 p.m. to 10 p.m. It is open from noon to 9 p.m. on 1 1 AMERICAN CANCER vf SOCIETY Sundays. From now through April 18, The Dragon Inn is featuring two for the price of one specials. CHINESE AND AMERICAN US $270.dW Combination Plate RESTAURANT $34S 10 DISCOUNT FOR SENIOR CITIZENS and up FRIENDLY SERVICE MODERATE PRICES .GOOD FOOD For Take Out Orders COMFORTABLE ATMOSPHERE PLENTY OF PARKING 51 5 11:30 OPEN FBI i SAT 11:30 AM - 10 MIDNIGHT 10:00 PM 1 480 MONDAY CLOSED CLEARFIELD Clearfield resident John L. Kamhoot has been promoted to assistant vice president for the Bank of Utah. He is also collections manager, overseeing the recovery of the banks delinquent loans. Kamhoot previously supervised collections for two Salt Lake City banks. He is former president and director of the Ogden Consumer Credit financial institution with branches in the Salt Lake City and Weber CountyNorth Davis County areas. The bank has served these communities for over 30 years. Desk Dispensers Transparent Tape and Resists cracking yellowing and can be x on. written 610 Magic, 1296 High base, permanently attached tape drum. Available in $199 I tape. black, putty or chocolate brown. Roll Avery Data Processing 10 box. Labels No. 5615-S- per box. $1495 MYTH: Insurance Is not a good place to Invest your money. FACT: Money Magazine ft other leading financial analysts have identified life Insurance as one of the few, If not only, survivors of the tax reform act. Here Is an example of what Is available: Male age 45, non smoker One time, lump sum deposit (as opposed to a time certificate) $50,000. Amount payable at death of Insured $161,000 TAX FREE to heirs. Earnings on Investment 9.5 Net, Tax Deferred ($4,750 which can be withdrawn In the form of a no cost loan year with NO INCOME TAX PAYABLE! Just try to do that with any other Investment. You will find it hard to beat. As with most other time certificates ft Investments there is a small penalty for early surrender but only during the early years. It is definitely worth checking into! If you have any questions or just curious, please call and we can talk. Tom Stanger Gaye DaUir Rudy Alder Silvu Stanger Melody McCoard TOM STANGER INSURANCE 707 W. Riverdale Rd. 3 627-111- Box FREE Box of 5,000 Speed-oin- t Staples and Deluxe Stape lemover with the purchase of a 767 Stapler, Retail Value $27.35 Special Offer $24.40 Box 179S . 3M HD High Density Also Available 120 Pens MS-1- 1 Medium, Reg. $4.20 Doz. Act. Fine Reg. $9.48 Doz. AF-1- 1 S55S UIN Shopping Center South Fort Lane AYTON, UTAH 84041 1 16 Telephone 544-485- 3Va" 1516". One across. 5,000 x Reg. ' 55S Reg. $7.40 Double side, double density 5Vi diskettes. plastic, impact-resista- non-spli- p 3M Diskettes INSURANCE INSIGHTS By Tom Stanger MYTHS & FACTS LAYTOf In addition to his career experience, Kamhoot has completed courses offered by the American Insititute of Banking, Dun & Bradstreet and the National Business Institute. Bank of Utah is a $125 million 2295Doz. , .77,, N. MAIN Banker gets new job Reg. $2.56 roll. j-- and Dinner Specials Lunch Daily Lunch Transparent r 9. Clinton woman wins, try to pay beyond the minimum rate required in order to reduce the balance owed more quickly. p fees vary. Since the loan is a second mortgage there are costs involved. The line of credit requires a home appraisal, a title search, recording fees, and origination fees. These can total $400 tial time bomb. He said if the economy should turn bad or interest rates escalate, line of credit borrowers could find themselves with high interest loans secured by their homes. Lending institutions are screening people who apply for the loans and want the cream of the crop as far as credit applications are concerned. A good credit rating, job stability, and, of course, home ownership are essential. Jensen said the disadvantages of such a loan include the fact that the home is tied up and could be in jeopardy in cases of default, and that the open feature may be too much of a temptation for poor money managers. He said people who havent been able to manage credit cards should steer clear of home equity line of credit loans. The money from the loans shouldnt be used for living expenses, he said, but only for major purchases that one would normally be willing to finance by borrowing against his home. . CLEARFIELD The Lake-vieBusiness and Professional Womens Club will hold its monthly dinner meeting at 7:30 p.m. on Thursday, April 16, at the Country Garden Restaurant' in Clearfield. Advantages of membership in the Business and Professional Womens Organization will be discussed by Greeta Baur, a representative of the membership ' committee of the state federation. Anyone interested in learning about the organization is invited ' to attend. Reservations can be made by calling Charlotte Koehler, 544-- " 8760; or Jackie Radue, Cost of dinner is $7.50 is going to be popular mortgage. A newer home with a closer ratio of market value and mortgage owed may not qualify for such dramatic dollar amounts. Once the line of credit is approved, a borrower can use funds up to his credit limit any time he chooses. Payback rates are based on the prime interest at the lending institution plus a built-i- n additional interest rate, usually amounting to 2 percent above the prime. The rates are variable and can increase or decrease often. They, are usually reviewed and changed monthly. A borrower can get to his funds in a variety of ways, depending on where he has established his credit line. Some banks give borrowers a book of checks to draw on their loans, others access them through overdrafts, credit cards, or by phone transfers. All banks make it convenient to borrow against the credit line at any time. Business briefs if4J 'This type of borrowing open-ende- . mmm&gpg. 0 friend or foe Lakeside Review correspondent TTt 3T 7C 5 Black, Blue, or Red . . . : . |