The News Journal, Wilmington, Del. Saturday, Jan. 23, 1 993 Section Classified begins on Page C2 The assumable, fixed-rate home loan comes back Rooms with a river view 7, F. A mm I can assume the loan, he must be approved by the lender, who will check such factors as income, as-, sets and credit just as if it were a brand new loan. Moreover, the loan is for primary residences only.
Investors and vacation-home buyers need not apply. Will DMR Financial's bold ex-, periment prove successful? The extra cost isn't great, only 0.25 percent above the rate for non-assumables. But it could add up. Let's look at a $100,000, 30-. year loan to see the difference: At 8 percent for a non-assum-! able loan, the monthly payment for principle and interest would be $734.
But at 8.25 percent for an assumable loan, the payment would be $752, or $18 a month higher. Over a year's time, the extra cost is $216. And if you hold the loan for 10 years, you've paid out $2,160 more than you would have had you chosen a non-assumable mortgage. However, if mortgage rates rise, as they almost surely will, an 8.25 percent mortgage might look awfully good to a prospective buyer 10 years from now, perhaps even good enough to earn the seller a -r V- r-" I 3 v-1 Special to The News JournalROBERT CRAIG Fishmonger Jeffrey A. Owens led the development of condominiums on family land on the Susquehanna River near Perryvllle, Md.
Comdlos oe the nq0ehainiinia The assumable loan has been resurrected in Illinois, Indiana, Kentucky and Michigan. By LEW SICHELMAN United Features WASHINGTON Like an older but wiser former heavyweight champion, the fixed-rate assumable mortgage has started out on the comeback trail. Currently, a Michigan-based lender is offering assumable conventional loans in only four Midwestern states. But if the assum-ability feature proves as popular as UMR Financial Services thinks it will be, 15-, 20- and 30-year assumable mortgages may once again be available on a national basis. And if that milestone is reached, it will be the first time in more than a decade that homeowners will be permitted to pass on their below-market conventional fixed-rate home loans to their buyers when the time comes to move to another house.
In the 1970s, sellers could trade their loans along with their houses without interference from their lenders. Indeed, lenders encouraged assumptions because it allowed them to keep loans on their books that otherwise would have been terminated. In those days, mortgage rates were relatively stable. Rates didn't change often, perhaps once a year or so. And when they did shift, they rarely moved more than an eighth of a percentage point.
In the late '70s, however, inflation started to drive mortgage rates skyward at a rapid pace. This made the assumability feature even more valuable to sellers, who could offer their below-market loans as a strong incentive to buyers. But because assumptions forced lenders to keep low-rate mortgages on their books longer than they now wanted, the feature wreaked havoc on their bottom lines. To prevent buyers from taking over older, low-rate loans, lenders started enforcing due-on-sale clauses in their mortgage contracts. And when the Supreme Court ruled in 1982 that lenders had the right to do so, assumable fixed-rate loans disappeared.
Now, DMR has resurrected the assumable loan in Illinois, Indiana, Kentucky and Michigan. But it's a little different. For one thing, today's assum-ables are priced slightly higher than non-assumables, and a 1 percentage point assumption fee will be assessed if and when the loan changes hands. In the old days, there was no premium or fee. For another, the loan is no longer freely assumable.
In other words, it can't be passed on to just anybody, as it once could. Now, before a new borrower Family reels in replacement for fishing business of nice waterfront here. I talked to a couple of architects, and things just went from there." To maximize the value, the Owens family, who were not developers or builders, decided to build condominiums. Jeffrey Owens chose ABSP Architects of Annapolis, Md. After talking to real estate agents and several homeowners, Owens picked Clark Turner of Bel Air as the builder.
"I just heard that his homes had the best resale," Owens said. "It was very important for me to get a good builder because we're all going to live here in the complex. My father, who is 77, my sister, Cynthia, and I will each have a condo. We're excited about living on the water." The first residents moved into Owens Landing and Marina community last week. The community held its grand opening last weekend.
Sales agents Lisa S. and Robert D. Cameron at the Sellers Connection of Cecil County in Elkton were unprepared for the 600 people who toured the two models. Prospective buyers came from as far away as Tarrytown, N.Y. But many were from Wilmington, Newark, and Baltimore.
"Word gets around in the boating community. Boating people talk to each other," said Lisa Cameron. So far, three contracts have been signed, and nine reservations have been made. From the weekend activity alone, the Camerons expect to get 15 contracts. The plan for the community call for 114 condos in six clusters.
Each cluster is four stories and holds from nine to 33 homes. All have an unobstructed water view. A swimming pool will be built and is expected to open in the summer. Floor plans range from 1,300 to 2,300 square feet. The two plans: A one-floor model with two bedrooms and two baths.
A two-story home with three bedrooms, three baths and a recreation room. Options include gas fireplaces, whirlpool tubs, security systems and intercoms. The complex is served by municipal water and sewage. Prices range from $124,900 to $184,900. The condo fee is $82 a month.
Residents have the option of buying a boat slip at the deep-water marina for $15,000 to $20,000, or they can rent one for $800 to $1,600 a season. By MAUREEN MILFORD Staff reporter PERRYVILLE, Md. For three generations, the Owens family has made a living on the water at the mouth of the Susquehanna River. Patriarch A.H. Owens began by operating a fish market in the early 1900s on a 7.5-acre parcel just south of Hatem Memorial Bridge on U.S.
40. When the river froze, Owens cut ice, packed it in straw and sawdust and stored it on the site. Next, his son Hanford W. Owens took over the fish business, shipping wholesale all over the country. As a side venture in the late 1950s, Owens built a 220-slip marina on the site.
But in the late 1980s, the fish business began to decline. Fishing bans on various species, including rockfish and shad, and general declines in the fishing yields was a clear sign to the Owens family. "We knew the fish business wasn't going to last forever," said Jeffrey A. Owens, the third generation of Perryville watermen and Hanford's son. The family began thinking long and hard about the best use for the land off Broad Street at River Road.
"We started looking at waterfront values and what houses were selling for," said Jeffrey Owens. "Then we realized we had a lot better price for his house. But even if rates don't ratchet higher, Charles Adams of DMR Financial believes assumables have certain advantages for buyers as well as sellers. Because homes sold with their mortgages intact don't need appraisals, repairs, surveys or title searches, he points out, there less cost and paperwork involved. There is a 1 point assumption fee.
But the buyer would pay that or more for a new loan. And in a tough buyer's market, the seller can always agree to pay the charge as an added inducement. Taking the scenario even further, the DMR executive also thinks that real estate agents will work harder to sell houses with assumable mortgages because they will get paid sooner and that investors in the secondary mortgage market will embrace assumables because yield-destroying prepayments will be reduced significantly. Overall, Adams calls the revival of the assumable mortgage "one of the most exciting" develop- ments in the mortgage business in the last 20 years. Elites remain low for refinancing REAL ESTATE WATCH bility monthly payments rise and fall according to the balance outstanding and on some lines you have the option of paying interest only.
One final option when refinancing: If your mortgage exceeds $203,150, you'll have to pay a "jumbo rate" when you refinance, which is somewhat higher than the rates for loans below $203,500. For families whose mortgages Mortgage rates drop to 8 B8 are only slightly above that mark, say in the $210,000 to $220,000 range, it might make sense to reduce the first mortgage during a refinance to $203,500 and put the remaining debt on a home equity line. That way, your long-term interest rate carrying most of your debt is lower and you probably will be able to pay off most or all of the small home equity loan before the variable rate rises Ju vf tf-Jw-mm-te I 1 percent interest, which would reduce your payments to about $660 a month. Take $25,000 cash out of the equity you have in the house, increasing the mortgage to $115,000. At 8 percent interest, the monthly payments would be about $850, just $60 a month more than you're paying now.
Cut your mortgage term to 15 years. Monthly payments on a $90,000 mortgage at 7.6 percent interest for 15 years would be $840, about the same as the payments on $115,000 for 30 years. Fold a line of credit into a first mortgage, which would give you stable payments but probably would not reduce your monthly costs. Most equity lines have variable rates that could rise in the future but for now are at an attractive 7 percent to 7.5 percent. And unlike a first mortgage, equity lines give you financial flexi- By PAMELA REEVES Scripps Howard News Service Homeowners who thought about refinancing last winter and never got around to it are in luck.
Mortgage interest rates are lower now than they were at this time in 1992 or 1991. As of Friday, you could get a 30-year fixed-rate mortgage at 8 percent on average around the nation, the Federal Home Loan Mortgage Corp. reported, and a one-year adjustable rate of 5.20 percent. That report didn't include 15-year mortgage rates, but HSH Associates, which does a weekly mortgage survey, said those were down to 7.6 percent a week ago. Although mortgage rates may rise slightly in coming weeks, a number of market analysts expect inflation to remain low, which generally keeps interest rates low as well.
If you have a mortgage of 9 percent or higher, it probably would be worthwhile to consider refinancing. For some families, the low rates present a good opportunity to take equity out of the house, perhaps to pay college tuition or remodel a room. Or, you might want to roll a home equity line of credit into a first mortgage. For example, say you have a fixed-rate, 30-year mortgage of $90,000 with a 10 percent interest rate and a house valued at $160,000. Your current monthly mortgage payments for principal and interest are about $790.
You could: Refinance that amount at 8 Special to The News JournalSALLIE K. STABLER This home at 707 Kllburn Road, Edenrldge, New Castle County, recently sold for $320,500. tt last sold for $268,000 In 1986. Property transfers on C2. 15-yr fixed 30-yr fixed 1-yr ARM 15-yr fixed 15-yr fixed 30-yr fixed 1-yr ARM Lender Phone Fit V.
Pts Pts Mellon Bank (Del.) 292-6511 6'. 3 TA 3 AV, 2 Mercantile Mortgage 479-8350 TA 3 8 1 A'A VA Meridian Mortgage 421-7240 na na na na na na Merit Financial 426-1260 7 3 TA 3 4 3 MortgageBankers of Amer. 737-2274 TA 3 TA 3 A'A 3 Mortgage Benefit Fin.Grp. 302-656-1266 na na na na na na Mortgage Reduction Serv. 455-1670 na na na na na na National Future Mortgage 427-6520 TA 0 8 0 5 0 Ninth Ward Savings Loan 654-7791 TA 3 8 3 5'A 2'A Northslar Mort.S Finance 798-1200 TA 0 8 0 5'A 0 Norwest Mortgage 324-8780 8 0 8 0 A'A 0 Peoples Bank of Elkton 800-528-4258 na na na na 6 1 Philadelphia Mortgage 429-0999 7 3 TA 3 A'A 3 Pinnacle Mortgage 998-6830 6.99 2'A TA 3 A'A 3 Preferred Mortgage 656-7676 TA 3 TA 3 A'A 3 Reliance Mortgage 456-9401 TA 2'A TA 2'A 5'A 0 Rockland Mortgage 239-1818 TA 1 8 1 VA 3 Rockwell National 239-2645 TA 3 TA 3 3 3 Sears Mortgage 800-222-5514 TA 0 8 0 4 2'A Second National Federal 995-1433 na na na na na na Senator Mortgage Corp.
426-1230 7 3 TA 3 A'A 3 Shallcross Mortgage 427-2720 TA 3 7 3 A'A 3 Southeastern Mortgage 478-1180 7 2'A TA 3 A'A 2'A Stanton (SFC) Mortgage 368-0656 TA 3 TA 3 A'A 3 Sunset Mortgage Company 475-5508 7 3 7 3 4 3 Sunvest Mortgage 995-1589 TA 0 8V4 0 A'A 3 Telestar 762-2324 TA 0 B'A 0 4 3 TransEastern Mortgage 427-8180 TA 'A B'A A'. 3 WestAmerica Mortgage 800-365-7071 na na na na na na White Eagle Fed. 654-6224 TA 3 TA 3 5 3 WSFS 673-3224 7 3 7V. ij 4 3 Wilmington Trust 651-8848 TA 3 TA 3 6 2'A Lender Phone Pt Pt Pt Lender Phone Pt Pt Pts AAA Mortgage Services 456-9619 7 0 8Vi 0 5 0 Delaware Mortgage Co. 239-9131 7V.
3 7 3 4 3 Access Mortgage Corp. 324-8230 7 0 8 0 5 1 Delaware National 855-2404 na na na na na na Accurate Mortgage Serv. 234-5626 TA 0 6Vt 0 4 3 Delaware Savings 65179 7 3 7.99 1 4 1 Admiral Mortgage 655-3745 7V. 3 TA 3 4'i 3 Delaware Trust 421-7600 7.2 3 7 65 3 5 2 Amato Stella 633-5650 7 3 7 3 4 3 Diversified Mortgage 324-8110 7 3 7 2'A 4 2 American Family Mortgage 888-1993 7 3 7 3 4 0 Dover Federal CU 678-8000 7 3 7 3 na na American Financial MC 800-969-5750 7 2A 7V, 3 4 0 Eastern Mortgage Services 325-5200 7 0 8 0 4 1 American Home Funding 800-685-1937 7 2 7 3 4 2 Emerald Mortgage Co. 800-833-2255 na na na na na na Artisans Savings 658881 7 2 7 2'A i'A 3 Equity Mortgage 737-1900 7 2 VA 2'A na na Atlantic Federal 410-398-2966 7 1 7 2'A 4 3 Equity Plus 302-651-9211 na na na na na na Atlantic Home Mortgage 737-1630 7 Va 7 2'A 4 1 Fairfax Mortgage Corp.
800-787-3366 TA 3 TA 3 4 2'A Atlantic Residential MC 454-0259 7 2 TA 2'A A'A 2 Financial Serv. Mortgage 301-398-8895 TA 0 8 0 5 0 Balto. TrustMercantile 537-2600 na na na na na na First Carolina Mort.Corp. 738-9970 TA 0 VA 0 5'A 1 Bancroft Mortgage Corp. 234-0300 TA 0 8 0 4V, 3 First Continental Mort.
984-2468 TA 1 TA 1 4 1 Bank of Delaware 800-955-5111 TA 3 TA 3 4 3 First Federal 421-3678 na na na na na na Beneficial Mortgage 731-2500 8 0 8 2 5 VA Beneficial National 792-4680 TA 3 TA 3 na na First Financial Funding 800-227-5530 TA 3 TA 2'A 4 3 Bridgeville Bldg. Loan 337-8008 9 0 na na na na First State Bank 888-7500 na na na na na na Capital Mort. Finance Grp 651-9984 6'A 3 7 3 4 3 Freedom Mortgage 800-788-6777 na na na na na na Capital Partners MFC 800-253-6365 6.99 3 TA 3 4 3 Gilpin Mortgage 656-5400 7 3 TA 3 4 3 Chemical Residential 529-9470 7 3 TA 3 4 2 G.M.A.C. Mortgage 994-6860 TA 0 B'i 0 6V, 0 Christiana Mortgage 657-5050 7 3 TA 3 4V4 3 Gordy Mortgage 322-1414 TA 2V, TA 2 4'. 2V, CMC 366-1661 6s4 3 TA 2'A 4 2 Group Mortgage Corp.
378-7520 7 3 TA 3 4 2'A Coastal Federal Mortgage 800-772-6278 7 3 TA 3 4 3 Hart Mortgage Corp. 573-9457 na na na na na na Collective Fed Svgs 800-231-7610 7 3 TA 3 4.95 2 Home Financial Services 737-1036 na na na na na na Collective Mortgage Serv. 239-1900 na na na na na na Home Funding Mort. Corp. 658-0601 7 3 TA 3 4 VA Commercial Mortgage Co.
478-8310 7 3 TA 3 A'A 3 Huntington Mortgage 479-9230 TA 3 TA 2 4 3 Commonwealth United 999-7000 TA 3 TA 3 5 2'A JCPenney National 302-398-3232 iV. 2 8 2 6 2'A Consumer First Mortgage 800-296-9493 TA 2V TA 2 4 2V Landmark Mortgage 992-9878 TA 3 TA 3 5 0 Countrywide 791-9991 7 2'. TA 2'A 4 2 Loyola Mortgage Corp. 800-826-5262 TA 8 0 5 2 County Bank 226-9800 TA 3 7 3 na na Margaretten Mortgage 792-9600 na na na na na na County Mortgage Services 215-359-8282 7 3 TA 3 AVt 3 Maryland National 456-0776 TA 3 7 3 4 3 Rates compiled by Betty Thomas. Local lenders wishing to participate in this survey may do so by faxing (302) 324-5509 no later than 3 p.m.
each Friday. For information on individual lenders, please refer to accompanying phone numbers A 1.
