Saturday Reporter-Herald August 14, 2010 E1
Real Estate Matters
www.homeandrealtyguide.com • Saturday, August 14, 2010 • Reporter-Herald
Adjustable loan may be risky ILYCE GLINK TRIBUNE MEDIA SERVICES
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uestion: We are being offered an FHA Streamline loan. We currently have a 5 percent fixed rate loan. We’re thinking about taking a 3.875 percent 5-year FHA adjustable rate mortgage. Is this a viable idea? We are being told that in the worst-case scenario, if interest rates were to rise, the rate could only go up 1 percent per year, so it would be 5.875 percent in the 7th year. Is this truly the worst-case scenario? Answer: An adjustable rate loan (ARM) generally will have certain yearly caps and will have a lifetime cap. In your case, your FHA loan would become a new loan with a starting interest rate of 3.875 percent. That’s a great rate by historical standards. However, the interest rate would only be good for five years. At the end of the five-year period, the interest rate on that loan would fluctuate depending on where interest rates are in the market. If interest rates have gone up, the interest rate on your loan will go up. However, the loan may have a maximum increase of 1 percent per year. So your interest rate for the sixth year could go up to 4.875 percent, and the same could be true the following year, with an increase to 5.875 percent. These loans usually cap the interest rate increase over the lifetime of the loan to five percentage points, so the maximum interest rate for your loan would be 8.875 percent. If you plan to live in the home only for the next three to five years, this loan might be a good option for you. But keep in mind that you need to make sure that you aren’t paying too much in fees on the loan being offered to you. Even your current 5 percent loan is a pretty good rate. Interest rates might fall further. This week, the 30-year fixed rate loan reached about 4.25 percent from many lenders (Freddie Mac reported the average 30-year rate as 4.49 percent, a new record low). Interest rates on a 15-year loan were available as low as 3.75 percent. While all this sounds like nearly free money, make sure you’re changing your loan terms for the right reasons. If you plan to be in your home for the next 20 years, you might want to consider a longer lock on your interest rate. If you’re having trouble paying your bills, or expect to lose your job or income soon, and have applied for the loan change to reduce your monthly expense, you I See GLINK/Page E4
Instant Playground Neighbor to Neighbor, Home Depot collaborate on Fort Collins playground JADE CODY SPECIAL SECTIONS EDITOR
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fter exhausting day-long construction, 68 families and nearly 100 children have a new place to play. Neighbor to Neighbor, The Home Depot and Kaboom partnered to build a new 2,500 square foot playground at Coachlight Plaza Apartments in Fort Collins. “We’re pretty thrilled to be able to offer it to our community and residents,” said Wendie Robinson, executive director for Neighbor to Neighbor. She said the project will serve its largest low-income apartment community. Since 1970, Neighbor to Neighbor has provided housing options, support and counseling for low-income residents in Larimer County. The playground was constructed in one day, though plans for it started last year with a grant application. Neighbor to Neighbor contributed $7,500 for the project, and received major sponsorship via a $65,000 grant from The Home Depot Foundation. Representatives from The Home Depot and Kaboom were also on hand in construction efforts. The Home Depot is a founding partner of Kaboom, a national nonprofit organization that builds playgrounds. To date, Kaboom has built over 1,800 playgrounds and 3.5 million children. Kaboom’s mission is to
Photos courtesy Neighbor to Neighbor
Volunteers construct a playground for Coachlight Plaza Apartments in Fort Collins on Aug. 12. create a place to play within walking distance of every child in America. The previous playground at Coachlight Plaza Apartments, which was constructed in 1982, was old, dilapidated and unsafe for the children, Robinson said. The trio of organizations first removed and recycled the older playground equipment, then went to work on installing the new playground. It features picnic tables, tree benches, a shed, a fence around the community garden and a pergola for parents keeping an eye on children at play. “We’ve been thrilled,” Robinson said. “Many of the residents got involved with the planning and construction.” Children will be able to play on the playground starting Sunday, after the cement has dried.
HUD offers grants for counseling COLORADO ASSOCIATION OF REALTORS The U.S. Department of Housing and Urban Development announced that $79 million is available for housing counseling programs to help families find and preserve housing. These grants will be awarded competitively to HUDapproved counseling agencies and State Housing Finance Agencies. National and regional agencies distribute much of HUD’s grant funding to HUD approved community-based housing counseling organizations that provide advice and guidance to low- and moderate-income families seeking to improve their housing conditions.
More than 220 volunteers from the community, local The Home Depot stores, Neighbor to Neighbor, and organizers from the nonprofit organization Kaboom helped with the playground construction. The Home Depot Foundation was created in 2002, and has built or refurbished more than 1,875 playgrounds, parks and green spaces. The organization has granted $190 million to nonprofit organizations. The Loveland Housing Authority worked with Kaboom in June for a new playground at Orchard Place Apartment Community in Loveland. ABOUT NEIGHBOR TO NEIGHBOR Neighbor to Neighbor serves Larimer County residents in three key client service areas: • Renter Program, which as-
sists the homeless and renters to identify, secure, and maintain affordable, sustainable housing and work toward self-sufficiency. Neighbor to Neighbor provides up to $300 per household in emergency rent assistance to prevent homelessness. • Affordable Housing Program, which provides 126 units of safe, decent multi-family housing to low-income renters in 10 properties in Fort Collins and Loveland. • Home Ownership Program, which helps renters work toward successful home ownership, counsels homeowners in crisis to help prevent foreclosure and provides guidance to seniors considering a reverse mortgage. For more information, visit www.n2n.org, www.homedepotfoundation.org and www.kaboom.org.
Fannie Mae launches online resource to educate struggling homeowners COLORADO ASSOCIATION OF REALTORS
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annie Mae has announced the launch of www.knowyouroptions.com, a new consumer education website that outlines the choices available to homeowners who are struggling with their mortgage payments, and provides guidance on how they can contact and work with their mortgage company to find solutions. The online resource, which offers reliable and easy-to-understand information in both English and Spanish, expands on Fannie Mae's ongoing efforts to help struggling borrowers find alternatives to foreclosure.
Key features of KnowYourOptions.com include: • Interactive Options Finder to help homeowners identify options that might be right for their situation; • Calculators to help borrowers understand how many of the options work, including refinance, repayment, forbearance, and modification; • Videos featuring real homeowners discussing how they received help and housing counselors providing advice; • Next steps and helpful forms, including a financial checklist and contact log to help borrowers be prepared when contacting their mortgage company or housing counselor.
Inside this week’s Home & Real Estate
Real Estate Transactions
Downtown Project
Home purchases in the Northern Colorado area
Stalled downtown project seeks investors
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Featured Home Plan
Cicadas’ Summer Song
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Craftsman features adorn the spacious Ethridge
Carol O’Meara delves into this musical insect
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