KMG Blog

Kootenai County, Idaho: Important Numbers to Know

In this series, I will be featuring the photography of Tim Eberly.  There is no one who better captures the essence of North Idaho! 

 Local Governments:

Athol	30355 Third St, Athol	683-2101
Coeur d'Alene	710 Mullan Ave, Cd'A	769-2300
Dalton Gardens	6360 4th St, Dalton	772-3698
Hayden	8930 N. Government Way, Hayden	772-4411
Kootenai County	501 N. Government Way, Cd'A	446-1000
Assessor		446-1500
Building		446-1040
Planning		446-1070
Recorder		446-1480
Surveyor		446-1570
Treasurer		446-1005
Post Falls	408 Spokane, Post Falls	773-3511
Rathdrum	821 Main St, Rathdrum	687-0261
Spirit Lake	6159 W. Main St, Spirit Lake	623-2131
Worley	9936 W. "E" St, Worley	686-1258

Other entries in this series include:

Utilities

Law Enforcement

Government Agencies

Licenses

Post Offices

Schools

Medical Facilities

A Brief Tutorial on Adjustable Rate Mortgages (ARMs) in THREE easy steps!

STEP 1:

You typically see ARMs advertised as follows:

1/1, 3/1, 5/1, 7/1, 10/1
or
3/6, 5/6, 7/6, 10/6

What does this mean?  In the former's case (3/1, for example), it means the loan is FIXED for the first 3 years and adjusts every 1 year after that.

In the later's case (3/6 for example), it means the loan is FIXED for the first 3 years and adjusts every 6 months after that.

STEP 2:

What if you get into your adjustment period?  How is your rate determined?

Index + Margin = New Interest Rate

Every ARM is linked to an Index at the time of origination.  Some to the U.S. Treasury, some to the LIBOR.  These indexes change frequently.  Furthermore, every loan is given a Margin at time of origination.  This margin is a FIXED number and does NOT change.  Add these two together and you get your new interest rate.

STEP 3:

All ARMs have CAPS, usually written as follows:

2/2/6
or
5/2/5

What does this mean?  The first number is the greatest your rate can adjust at the initial adjustment.  The second number is the greatest your rate can adjust at any subsequent adjustment period.  The final number represents the greatest adjustment over the life of the loan.

* * * * * * *

We will use my real life ARM as an example:

• In March 2008 I got a 3/1 ARM with 2/2/6 CAPS with an initial interest rate of 4.875%.
• My loan is due to have its first adjustment in April 2011.
• If my rate goes up at this point, it CANNOT go higher than 6.875%.
• My loan will then adjust every 12 months after that, with the second adjustment being April 2012.
• Over the life of the loan, however, my rate CANNOT go higher than 10.875%.

* * * * * * *

I know what you're thinking!  10.875% - eegad!!!!!!!  And, you're right.  Outrageous!

But, I have an ARM and my rate is about to go down!

A few nights ago I was at a Wine, Women and Wealth meeting.  The topic was mortgages and, thanks to my friend and colleague Erin Zasada (Financial Advisor at Wachovia/Wells Fargo) I had center stage.

Normally I would be all over the topic and ready and willing to give pointers and help in any way I can, but with the current economic climate, people are filled with worry and doubt.

To my pleasant surprise, the ladies had a mountain of questions, like "How can I pay my mortgage off early?" and the like.  It was a great time to re-enforce the positive, dispel the negative, reflect on the what's happening in today's market and, of course, drink some wine ;)

* * * * *

At one point in the evening, the topic changed to Adjustable Rate Mortgages (ARMs, for short).  All the ladies, as if on queue, started to express their concerns and fears in relation to ARMs.  Such is the case when groups of people get together and talk about home loans these days.

But, to my surprise, one of the ladies present at the meeting said, "Ya know, I just have to say one thing.  If people don't read their loan documents, it's their own darn fault.  I have an ARM, and it's a great loan."

Yikes!  My head spun around so fast I got dizzy!  Who is this speaking?  Who would dare insert dissension amongst the ranks?

She continued to explain why she liked her loan - for one, her rate is now LOWER than it was at the time she took out her loan.  Noticing the opportunity to educate my fellow club members, I gave a brief tutorial on ARMs (but only after making a note to myself to check my loan documents when I got home - more on that later!)

 * * For a brief tutorial on ARMs, CLICK HERE! * *

Remember my friend?  After our Wine, Women and Wealth meeting, I went home and looked at my loan documents.

If my rate were due to adjust today......drum roll please......my rate would go DOWN!!!

LIBOR today = 2.12%

My Margin established at the origination of my loan = 2.25%

My new rate would be:
2.12 + 2.25 = 4.370%

Who says mortgages and wine don't mix?!?!?!

"Goin' Green!" with the Hayden Lake Library on St. Paddy's Day

On Tuesday, March 17, 2009, the Hayden Lake Library will be conducting a FREE workshop on "Goin' Green!"

There will be a Master Gardener presenting and teaching about organic gardening and the importance of using sustainable materials.

The Kootenai County Solid Waste department will be present and able to answer any questions you might have about their recycling program.

Information will, also, be provided for kids and families on how going green can help save money!

There will be a short movie with popcorn and crafts for the little ones.

This program is open to all ages and NO registration is required.

Tuesday, March 17, 2009
4:00 - 6:30 pm
Hayden Library
8585 N. Government Way
Hayden, Idaho 83835

For more information, contact the library at 208-772-5612 ext. 120 or visit their website at www.ksalibraries.org