IPI
http://www.thecharlottepost.com
5C
Cljarlotte
THURSDAY, APRIL 1, 2004
REAL ESTATE
Roland Hawkins
Know
mortgage
rates
plans
It is not always a clear choice between an
adjustable rate mortgage and a fix rate
mortgage.
As interest rates rise, homebuyer’s con
sideration of the Adjustable Rate Mortgage
(ARM) as a viable option increases.
There are many adjustable rate options
available to homebuyers. You can choose
from a traditional 1 year adjustable up to a
tempting 10-year adjustable rate program.
In between 1 and 10 you can find attrac
tive three, five or seven years adjustable
rate mortgage alternatives.
Buyers must be watchful however, to
avoid adjustable rate mortgage programs
that contain potential negative amortiza
tion. All mortgages have amortization
schedules. The timetable schedule for pay
ment of a mortgage loan principal and
interest is called amortization.
Negative amortization is when a gradual
increase in a mortgage debt occurs. This
increase occurs when the monthly pay
ment is not sufficient to cover the principal
and interest due.
In a market of higher interest rates, con
sumers are more inclined to consider an
ARM option. Lower initial home loan pay
ments are very attractive to first time
homebuyers with limited incomes.
The most popular adjustable rate mort
gage is not a true adjustable rate mort
gage. This popular 2-1 buy-down mortgage
program is actually a combination of a
short term ARM and a fix rate mortgage
product. The first couple of years of this
loan program function as a 1-year ARM.
At the end of the third year this mortgage
will convert itself into a fix rate mortgage
for the balance of the loan term. For exam
ple, let’s say you obtain a 2-1 buy-down
program with an initial rate of 4 percent.
In the second year this loan rate will auto
matically increase by 1 percent to an inter
est rate of 5 percent. Then the following
year the rate will again increase once more
to an interest rate of 6 percent. The rate
will stay fixed for the remaining life of the
loan.
The opposite of the popular adjustable
rate loan would to be an adjustable rate
loan that subtly features potential nega
tive amortization. An example of this
somewhat outlaw loan program would be
obtaining an incredible low initial interest
rate or interest only payment for the first
five years. As loan interest rates rise, this
loan payment remains constant for a cer
tain time period. At the end of the specified
time period the difference is added back in
on top of the current principal due. This is
called negative amortization because your
principal balance actually increases
instead of decreases.
It is now easy to understand why you
should avoid all loans that pose potential
negative amortization. A loan like this
could create a tremendous amount of prob
lem for an impulsive buyer.
As interest rate rise it is wise to shop for
the best interest rate program that meets
your family’s needs and budget. Remem
ber, lenders are more competitive for the
home buying business in a rising interest
rate market.
Consumer refinance demands tend to
diminishes as interest rates rise, then
lenders are more apt the pay more atten
tion to their home purchasing portfolio.
Although we have been spoiled by the
availability of incredibly low interest rates
over the past year, now is still a great time
to purchase a home..
It is still a buyer’s market with deals left
to be made. Just beware that a deal using
an adjustable rate mortgage has the poten
tial for negative amortization that could
create a financial pitfall in the future.
Buyers must beware when considering
adjustable rate mortgages with rates that
seem too good to be true.
Just a reminder, the deadline to enroll in
the 2004 Home Giveaway is less than 15
days away.
ROLAND K. HAWKINS is a real estate agent
with Caldwell Banker United Realtors in Char
lotte. He can be reached at (704) 840-5762 or via
the Internet; http//: 'iVww.rolandhawkins.com
^ i ‘ J H-J^
fi t * f
iin.eK I
II! Ill” I
i.nni”.si I
PHOTO/ARA CONTENT
Tradition revisited in home design
ARTICLE RESOURCE ASSOCIATION
Though “traditional” in home
design has been interpreted as
stilted and formal in the past,
today’s “traditional” women are
redefining the style. No longer
fraught with excessive moldings
and fussy finishes, the new face
of tradition borrows the best of
old and new. Classic elements
are being combined with simpler
furnishings, tailored fabrics and
modem conveniences to provide
comfort and efficiency. Mixing
an antique bench from Bali with
a modem Italian leather sofa
and an African tribal hunting
mask is wonderful, not “weird.”
When renovating a kitchen, a
simple cabinetry door in a natur
al stain or fresh, clear color beats
a highly detailed door, dressed to
the nines in bulky cornices and
triple-stacked moldings. Even
traditional-minded home enthu
siast publications are recogniz
ing this movement, updating
their mission statements and
editorial content to reflect the
desire for classic styles mixed
with a bit of modernity.
Meredith Publishing’s Country
Home magazine features “A
More Modem Countrj^.” And
Traditional Home magazine
offers up “Classic Taste. Modem
Life.” Manufacturers are devel
oping products and services that
echo this new take on tradition
as well. The “New Traditional”
kitchen from Plain & Fancy
Custom Cabinetry is one exam
ple.
“Five years ago we saw tradi
tional being interpreted as “over-
the top,’ in cabinet finishes, door
styles, architectural details and
accents,” says Vince Achey, vice
president of sales and marketing
for Plain & Fancy. “Customers
used extravagant moldings
everywhere, and decorated with
heavily textured and patterned
upholstery and window treat
ments.
“Tbday, homeowners are look
ing for spaces that reflect sim
pler, cleaner style, with a scale
and overall look that’s easier to
live with.”
For New Traditional, the com
pany pairs one of its latest fin
ishes, Cashmere glaze, with its
oldest, best-selling door style,
Vintage, set off by a stainless
steel work surface and back-
splash. Since lack of storage con
tinues to be a great concern, a
butler’s pantry was incorporat
ed, boosting cabinet space for
maximum organization.
Not to sacrifice style for func
tion, this pantry has “show-off”
space for china and glassware
Please see TRADITION/6C
Take control
of messy
household
projects
ARTICLE RESOURCE ASSOCIATION
There’s no greater feeling of satisfaction
than when you complete a home improve
ment project and can stand back and admire
your work. And every do-it-yourselfer knows
that a successful project depends on having
the right tools. That includes the right prod
ucts to protect the work area and to clean up
quickly and effectively if something gets
spilled.
The folks at I Dig Pig have a lot of experi
ence in this area. Their products, made from
PIG Absorbent Fabric, are designed to tackle
tough, messy jobs. For 18 years, Industrial
users have relied on this fabric to handle big
messes in thousands of factories worldwide,
and the PIG brand (named for the way it
“eats” up grime) is known for innovative solu
tions for cleaning-up workplace tasks. Now
the company is making their versatile prod
ucts available to consumers.
The special PIG Absorbent Fabric is a multi
layer material specially bonded to make it 100
times stronger than paper towels. It absorbs
large amounts of liquids evenly and quickly.
The fabric comes in many different forms and
its uses around the house are endless. One of
the most popular incarnations is the PIG
Cleanup Tablet, 12 perforated 14-inch by 15-
inch sheets that can be hung in the workshop,
or stored in the broom closet, and even can be
kept in the trunk of your vehicle. Each sheet
holds up to one quart of liquid. Simply tear off
a sheet any time you need to clean up a messy
spill, whether in the kitchen, the car, the
garage or the workshop. Keep a sheet on the
bottom of the kitchen cabinet to protect
PHOTO/ARA CONTENT
against leaks from cleaning supplies. And in
case that plumbing repair didn’t work out
quite the way you planned, these sheets can
handle big messes, too.
Youll also find multiple uses for the PIG
Absorbent Mat Roll, 25 feet of tough, thirsty
fabric, in your choice of 15 inches or 30 inches
wide The roll is perforated eveiy 10 inches for
easy sizing and the larger roll is also perfo
rated down the middle; the fabric can be'eas
ily cut with scissors or a utility knife as well,
making it a snap to get the perfect fit for any
job.
The roll makes a great drop cloth for paint
ing - it not only catches drips, it absorbs
them, so you won’t track spilled paint around
the room. Or spread a piece of the mat on the
workbench before you tackle messy repairs
and you won’t have to worry about oil stains
or other spills and cleanup -will be a breeze.
It’s great for holding dirty tools or wet paint
brushes, too. And if your washing machine
overflows, or you forget to shut a window dur
ing a rainstorm, this is just what you need to
clean up the resulting mess.
The mat is available with an optional poly
ethylene backing to help protect surfaces from
those hea-vy liquid jobs or applications. Tb
keep dirt from entering your home, break out
Please see TAKE/6C