Olde Towne Partners Control 300 Acres on Wilmington

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					          Savannah News-Press • Saturday, March 10,1990




            You
     Sign for Loan
     Take Care
             ixed rates are stuck above 10
             percent and mortgage lend-
             ers m major markets are
             gearing up attractive single-
          adjustable-rate loan packages to
          you in for the spring financing
       But before you sign up, make sore
    yqiTre aware of some of the latest,
    coftiy wrinkles in the adjustable-rate
    mortgage (ARM) game.
       One that's appearing with increas-
    ing frequency is the ''rounding up/'
    rate-ratcheting technique. It's virtual-
    ly;! always disclosed in loan docu-
    ments, say mortgage industry under-
    writing experts, but rarely noticed by
    theconsumer.
        Here's how it works. Say you de-
    cide to go with a local lender whose
    published rate is the lowest -83/8
    percent, for example, on a one-year
    ARM. The closest competitor offers 8
    I/I percent In all other respects, the
    two loans appear to be identical. They
    each use the same one-year Treasury
    biH index. They both carry margins of
    2.75 points (the margin is added to the
    base index rate to arrive at the inter-       WILIMNGTON ISLAND PARTNERS: John A. Bailey Jr., left, and Robert L Diamond at model home in CXde Towne
    est rate you're charged). Both have


                                                  Developers Sitting Pretty
    maximum annual rate jumps of 2 per-
    centage points, and a lifetime rate
    cap of six points.
        In this case, however, the lower-
    priced 8 3ft percent loan will actually
    treat you worse, despite initial ap-
    pearances. That's because tucked
    away in the loan disclosure boiler-
    plate language is a "rounding meth-
    od" tirrtmtoiftft that could raise your
                                                  Olde Towne Partners Control 300 Acres on Wilmington
     rate significantly over time/ and cost                                                                                                                                                            homeowners to move up, said Bailey.
     you hundreds of dollars a year.              By BENJAMIN HEBEBBAND
                                                                                                    'When you have 300 acres of developable land, you may have                                             "It currently takes move-up buyers
           The 8 3/8 percent loan uses a rate-    Business Writer
                                                                                                                                                                                                       about one year to sell their (existing)
       rounding method that amounts to
                                                      Robert L. Diamond and John A. Bailey,         some land that is less desirable. Youcan't put a $150,000                                          home," said Bailey.
      -beads-we-win, tails-you-lose. At every
      Irate-change anniversary, the lender        partners in the Olde Towne Development            home on that land,'                                                                                    But Bailey and Diamond are confident
       gets to take the index, add on the mar*    Corp., are in the enviable position of holding            ,                     - Developer Robert L. Diamond                                        that the new breed of entry-level homebuy-
       gin, and then "round up to the nearest     on to the biggest tract of undeveloped land                                                                                                          ers will soon mature and look to move up.
      -eighth" of a percent. The 8 172 percent    on Wilmington Island.                                                                                                                                    "In the short run it may hurt, but adjust-
      "loin documents, by contrast, call for          Since acquiring the 300-acre Olde Towne           Ultimately, Olde Towne may be more            room, wet bars or whirlpool tubs.                ments in the market are under way," said
       the lender to round the index and          property off Perm Waller Road in 1985, the        than just one subdivision.                            "We tried to establish a subdivision that    Bailey.
       margin sum to the "nearest" eighth.        two developers have taken their time in cre-          "In the long-term, you may come in here       would characterize the traditional Savan-            Both Bailey and Diamond believe Olde
      ifbe crucfial word "up" is missing.         ating a master design plan to to help them        and enter another subdivision," said Bailey.      nah home style as in Ardsley Park," said         Towne's three strongest selling points that
       Tjie nearest rounding can go down, in      maintain a stake in the explosive Wilming-            Whatever the future may hold for Olde         Diamond, adding that details such as brick       will continue to attract buyers are location,
    ', the consumer's favor, not simply up,       ton Island real estate market.                    Towne, Bailey and Diamond currently are           mantles, crown moldings and bay windows          location and location.
    ;* HI the lender's favor.                         The preliminary niche the two develop*        putting their efforts into completing the sub-    substantiate his claim.                              "The beaches are dose by, we have an
    • j-T-At'the first anniversary change,        ers decided on was to build a subdivision di-     division's second phase.                              "This is not your low-country style subdi-   excellent school in May; Howard Elementa-
        the initial advantage of the 8 3/8 per-   rectly aimed at the move-up market with               The subdivision's 45-home first phase,        vision," said Bailey.                            ry School and we offer the quickest driving
        cent loan disappears forever. From        homes ranging in price from $119,000 to           where construction begun in July 1987, has            Amenities so far include two tennis          time to the workplace,/ said Diamond, who
        ttjen on, the disparity progressively     $160,000.                                         been sold out since May 1989. It was then the     courts, a basketball court and a playground.     attended May Howard
    ; worsens. How costly can the presence            That plan has worked so well in the sub-      developers started home construction on the       A five-acre lake currently is under construc-        Diamond, who femembers when the is-
        or absence of the word "up" be to          division's first phase that the developers       next 37-lot phase.                                tion. These amenities cost the subdivision's     land had only about/200 residents 40 years
      1 you? The answer ultimately depends         have decided to continue along the same              "We weren't really off and running until      residents $100 a year.                           ago rather than the current 17,000 residents,
        upon interest rate movements in the        lines in the project's second phase.              July last year with sales (in the second             Diamond said a swimming pool may be          said Wilmington Island has become a com-
      * Index, and the length of time you re-         The success of sales in the community's        phase), "said Bailey.                            added if the homeowners association de-          munity that can stana on its own.
      I tain the loan. But even on a relatively    recently opened second phase will give Dia-          Since July, the developers have con-          sires.                                               "Wilmington Island is self-sufficient,"
    > * short-term basis, the costs can be no-     mond and Bailey more than a clue as to how        structed 12 homes, of which seven have               "This is a family neighborhood," said Di-    said Diamond, pointing out that shopping,
    liable.                                        to proceed with the entire build-out of Olde      been sold so far.                                amond, noting that most of the residents fit     banking and school facilities are all nearby.
      I * ' Rounding up to the next eighth, for    Towne, which they expect to take another             According to Diamond, the pace of exist-      the profile of young professionals.                  Other than touting Olde Towne's Wil-
      ; k&tance, would allow your lender to        five years.                                       ing sales averages about 25 homes a year -            "Most residents are between 35 and 45        mington Island location, Diamond stresses
        take a rate that would otherwise be           But the developers are already hinting at      a pace he considers excellent.                   years old with two children and have previ-       that the subdivision's high elevation does:
      ifil percent and turn it into a rate of      the possibility of including lesser priced            "No Savannah subdivision in this price       ously owned a home," said Diamond:                not mandate flood insurance.
        0jB25 percent. Or to take a rate that      homes in the $100,000 to $120,000 range in fu-    range is doing better," he said.                     Attracting previous homeowners or the            "That and saving the tuition to a private
        •fcould be 10.01 percent and knock it      ture phases of Olde Towne.                           The developers offer 14 basic models of        move-up market has been influenced by Sa-        school (by sending schoolchildren to May
      f Vp to 10.125 percent. A rounding up            "When you have 300 acres of developable       homes, which range in size between 2,000         vannah real estate market conditions that         Howard) can save you a lot of money," said
        Clause allowing movements to the           land, you may have some land that is less         square feet and 2,600 square feet. Addition-     have created a flood of affordable housing.       Diamond.
        next-highest onenquarter percent - a       desirable. You can't put a $150,000 home on       ally, homebuyers can choose from a list of           A recent surge of entry-level home con-          Ben Fanner Realty handles Olde
        less common but more aggressive            that land," said Diamond. "It will force us       over 30 options, which include items such as      struction in the Savannah area may have          Towne's home sales, but broker participa-
        technique - would cause rate distor-       into some compromises."                           dining room bay windows, a finished bonus         slowed the ability of current first-time         tion is encouraged.
        tions twice as large.
            In hard dollars out of pocket, even                                                                                                                                                                                    .-
        dee-eighth of a percent mounts up.
        Generally speaking, the larger the
      ; loan, the bigger the hit. Asked to ex-
                                                  Some Tips on Weatherstripping:                                                                                      Sash channels
                                                                                                                                                                              Spring metal strips
                                                                                                                                                                                                       Coming Events
      ; amine a set of actual mortgage docu-
        ments indexed to one-year Treasury        Blocking Out Cold, Keeping It In                                                                                                    Sash stop
                                                                                                                                                                                                       In Real Estate
      * acfcurities, the mortgage analysis firm                                                                                                                                                           March 12, 1990: The Savannah Board of
      * of Loantech, Inc., Gaithersburg, Md.,         Q. My windows are very leaky. They
      * fnported the following:                   waste energy and let dust and noise get in-                                                                                                          Realtors will sponsor a Red Cross blood
      r*I'For otherwise identical ARMs, a         doors. When is the best time to weatherstrip                                                                                                         drive at the board office at 7015 Hodgson
      * if percent rounding-up clause is like-    them and what is the best type of weather-                                                                                                           Memorial Dr. from 10 a.m. to 3 p.m. The
      -Iy to cost you a net $1,080 extra over a   stripping to use? S. F.
                                                      A. If you are trying to block the winter
                                                                                                                       OitYour                                                                         blood drive will coincide with a "Best Legs"
                                                                                                                                                                                                       contest featuring prominent Savannah busi-
      ~ 14-month holding period on a $200,000
      : nfortgage, or $216 a year. The cost is    cold, late winter or very early spring is the
                                                  best time to weatherstrip your windows, es-
                                                                                                                       Utility                                                                         ness men. For information call 354-1513.
      -likely to be an extra $540 over the
      : holding period on a $100,000 loan, $108   pecially wood. The frame and sash shrink
                                                  during the winter and the size is stabilized
                                                                                                                       Bilk                                                                               March 22, 1990: Brenda Haren of Union
                                                                                                                                                                                                       Planters Mortgage Co. will present a con-
      ;i;year Double those figures if your                                                                                                                    Nails                     Chisel         ventional loan seminar from 9:30 a.m. to 1
        round-up clause specifies one-quarter     now. Don't wait until summer or fall when          James Dullev
           a percentage point.                    they have swelled again.                                                                                                                             p.m. at the office of the Savannah Board of
            Should you care about $100-$200 ex-       If your main concern is lowering cooling         Adhesive-backed foam weatherstripping          EASY: Spring metal strips                        Realtors, 7015 Hodgson Memorial Dr. For
              a year or 11,000-plus over 60       costs, wait until late spring or early sum-       is the least expensive and simplest to in-                                                         information call 354-1513.
      * Jtoonths? That's up to you, but a mort-   mer. By then the windows will have swelled        stall. It is very effective for larger gaps,          A tubular vinyl strip comes attached to a
      Ifage executive of the Federal Home         to their stabilized-summer size. Caulk and        however, it is not very durable. You should       wood, aluminum, or plastic mounting strip.           April 4-6,1990: Georgia Tech will present
      "MMin Mortgage Corp. (Freddie Mac)          adhesives are also easier to apply in warm        only use it on windows that are not frequent-     It's designed to mount on the indoor surface     a three-day "Elements of Style" seminar.
      *jMid investors in home loans "defi-        weather                                           ly opened and where it is just compressed         of the window frame or sash. When the sash       Topics include "Intown and Suburban
      . tritely would pay a premium" for the          In a typical house, the gaps around all       with no sliding friction                          slides closed, it's slightly compressed. It      Homes," April 4; "Interiors," April 5; and
      l«£tra rate-yield such loans offer.         the old windows can be equivalent to a sev-           For frequently-opened windows and ones        can be seen on the window frame, however,        "Neighborhoods and Communities," April
        Package them into securities of hun-      eral-square-foot hole through your wall.          where the weatherstripping is subject to          it's not unattractive                            6. For details call Peggy Bel at 356-2390.
      •flreds of mortgages, and the extra $10      Weatherstripping windows can easily pay          sliding friction, a spring metal strip or tubu-       You can write to me at the Savannah
      .'46 $20 a month per loan begins to look     back the material cost in a month or two. it     lar vinyl gasket is best. The spring metal        News-Press, 6906 Royalgreen Drive, Cincin-          April 11, 1990 Realtor Janice Gantt will
               sweet. The executive noted that     should make your house more comfortable          strip is particularly effective for relatively    nati, Ohio, 45244 for UTILITY BILLS UP-          present a sates success seminar at the
                  Mac's own uniform mortgage       year-round and reduce dust and outdoor           narrow, more-uniform gaps.                        DATE No. 096 showing a buyer's guide list        Coastal Georgia Center for Continuing Edu-
                      specify roundings to the     noise                                                You generally attach the metal spring         for seven common types of weatherstrip-          cation For times and registration, call
                   " eighth, not necessarily up       There really isn't one best type of weath-    strip with small nails in the sash track of       ping showing price, durability, resistance to    356-2243
                 key here is to ask at loan ap-    erstripping for all window applications. The     the window frame The V-shaped strip is re-        compression and friction, and gap uniformi-
        nficatiofi what "rounding method" the      proper selection depends on how often you        cessed, so it can't be seen when the window       ty, and diagrams of how to install several          April 29-May 5: American Home Week.
                                                   open and close each window and whether           is closed. Then use a chisel or screwdriver       types. Please include $1 and a self-ad-          Savannah Mayor John Rousakis has signed
             CAM, Page 9C                          the weatherstripping is just compressed or       to bend out the free leg This springs against                                                      a proclamation for American Home Week
                                                   it must withstand sliding friction.              the sash to seal leaks                             • See TIPS, Page 9C                             For planned activities, call 354*1513.


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