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mi Ksim •rmim #s,vn m>\\ < M T . i o i m t . 3 • < H : I \ ( > SKK mi ALL-M;W I<m:> c iunsuK, IM.YMOI IN A IMMM I ( AH \ \ l> TIU ( K I INKS! * . Business • ' ARM questions are raised Adjustable rate mortgage option could be trouble By Yvonne Beer, executive vice- president, McHenry County Board of Realtors The McHenry County Board of Realtors responds to questions about real estate. We have heard many conflicting reports about ad- justable-rate mortgages CARMs). They've been called everything from time-bombs to the best financing option available. Would you please sum the facts and explain the wide diversity of opinion on ARMs? A. Much has been written about ARMs, which offer initial interest rates that are generally one to two percentage points less than the fixed-rate mortgages and later move up or down with changes in a standard measure, such as Treasury securities. They continue to be a topic that generates a large number of questions. Unfortunately, either of the descriptions you mentioned can be correct. However, a better understanding of this type of mortgage financing is leading to improvements that reduce the risk factors. It is important to realize that not all ARMs are alike. In fact, there have been literally hun­ dreds of varieties available across the country. The present move is toward fewer types and increased consumer protection. ealtors ECORD When ARMs first became popular, some sellers hoping for quick sales of homes and con­ dominiums offered ARMs with "teaser" single-digit interest rates. This permitted homebuyers to qualify for a loan based on jthe teaser rate. However, many of these loans allowed interest rates to rise quickly to full market level Banking school graduate Keith A. Leathers, assistant loan officer at McHenry State Bank, graduated recently from the Illinois Graduate School of Banking, a two-year program held at Southern Illinois University, Carbondale (SIUC). Hie school is designed to develop managerial and supervisory skills in bankers with at least five years professional experience. The curriculum emphasizes case studies and practical problem solving techniques and uses a compute r i zed bank ing simulation model. In addition to the classroom subjects, which include per­ sonnel management, asset and liability management, tax planning, real estate lending and bank law, four extension problems bad to be submitted A graduate of Eureka College, Leathers is a resident of McHenry and has been with McHenry State Bank for five years. within a year and continue to rise as quickly as the market. When this happened, some unwitting homebuyers found themselves in a position where they were unable to meet monthly payments. Ibe good news is that this approach has been rapidly v disappearing. Federal Housing Authority (FHA) ARM plans call for full disclosure on how much monthly payments may increase at the adjustment periods (once a year), including a "worst case" scenario. Many ARMs have limits on the maximum amount of in­ terest rate increase at the ad­ justment period, usually one or two percentage points, and include a maximum interest rate ceiling over the life of the loan, usually five to seven percent. Other features of a good ARM include indexing to Treasury securities and no prepayment penalty. If you have an ARM without protective caps and your payments have risen to the market level, consider refinancing with a new ARM which offers sufficient protection. But, make sure the financial provisions of both the old and new ARMs work out to your advantage. An excellent free booklet, "Consumer Guide to ARMs," is available by writing, Fannie Mae Consumer Guide to ARMs, P.O. Box 23867, Baltimore, MD, 21203. 7 To keep its professional members abreast of recent changes in the tax law, thr McHenry Area Chamber of Commerce is providing a noon luncheon program on Wed­ nesday, Oct/10, entitled, "The Business Person's Guide to the Tax Reform Act of 1984." The Professional Counr il invites all Chamber members and their guests to the event at Chapel Hill Country Club. There is a per-person charge. The meeting is scheduled to begin with a social time at 11:30 a.m. and end at 1:30 p.m. McHenry County area. Selected areas of 1984 tax legislation, which he believes will be of greatest ^nccrn to businessmen^ ir hiue em­ phasizing tax ' pportunities which remain p new tax traps which could • -u.e costly to the uninformed. A question and answer session will follow the presentation. Shippey addressed this same topic in seminars in Crystal Lake (Sept. 7) and Woodstock (Aug. 21). Anyone attending either of those should be aware the Oct. 10 presentation will be essentially the same. Reservations and menu selections are required for the Oct. 10 luncheon meeting. For more information or reser­ vations call the McHenry Area Chamber of Commerce at 385- 4300 from 9 a.m. to 4 p.m., Monday through Friday. BiA Lee LEE SHIPPEY Shippey, the featured AN INVITATION SHMG WITH THE FAMOUS "SINGING MACHINE" 1 StENt HEARD ON JOHNNY CARSON MIR V ORIFfM, P.M. MAOAZME AND THE WALLV PHILLIPS SHOW. Be a Star al Orsolini's every friday & Satur­ day Nite. Control the mike, become the lead singer, with fully orchestrated back'up music. Get the thrill of singing with a live band. Printed words to over 500 songs, many with bac k-up singers. CHOOSF. FROM®HIT TUNES* COUNTRY-CONTEMPORARY •OLDIFS®GOSPf:L speaker, is a tax specialist and CPA with McGladrey Hen- drickson & Pullen, a CPA firm with offices throughout the United States, and members of the McHenry Chamber. Shippey is a partner with the firm's Crystal Lake office and has 14 years experience as a tax specialist. He has \ been a frequent speaker on tax subjects to a variety of groups in the o Wt f AN MAKI A C ASSCTTl RtCOROINO » OK YOU TO KEtP OR GIVf TO YOUR IAMII r 0V FRIFNDS (OMI JOIN THl IUN' 00 IT WUH THF SINGING MAC HINf f RTFS 12 A 31 RICHMOND I I 815 678 6617 Machine", avai lable tor sale or rent lor home port ie\" lns»ar i t fu r 1 'FOOD THAT CREATES CONVERSATION SINCE 1MI" Try our complete dinner specials Tues.-Sun. •Brtnqnel Id i i l i l ics Avai lable •Vldjor C redi t C < i rds A< < epled •C losed Mond.ns • I l ine h from 11 J P.M. DELICIOUS ITALIAN & AMERICAN CUISINE! INDUS! CLASS STARTS OCT. 22 • 15-week course • Dty K evening classes * • Over 170 hours of in-depth training • Hands on computer facilities AppraMd by the Illinois Stat* Board of Education. Owned and operated by o«w of the Premier Retail Traval Agencies in Illinois. 31 E. 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