Gloucester County Democrat. (Woodbury, N.J.) 1878-1932, 1900-11-29
why BuiIding Asgociationa are Popular.

.
the difference between borrowing money oil
an individual lender and borrowing Of a,
building association, aud also gives loan,
association officers tip as to how they]
should enter the details Of q foreclosure.
A building association secretary has
handed me a statement showing the cost of
straight mortgage at 8 per cent. for twelye7
years, and also showing the cost of build
ing association loan for the same length o.
time. The figures given are:
81 600 straight mortgage:
Interest for twelve years. L44l1
Total ................. ............. sad
$4,000 building association loan
Dues for twelve years $i,s4Gi
Interest for twelve years ~ .940}
Total ................ ssssol
showing that the building association,
loan costs $3.50 less than the straight mort
gage loan Would this not make the build
ina association loan much less than per-
cent. per annum p
The rate Of interest is practically thel
same in each case, yet it is true that (thei
stock maturing in twelve years. the Dor
rover saves $3.50.
BY the building society plan the borrower
PAYS his interest monthly and also saves $40
a month for dues which he places in the
association. In twelve years he pays dues
amounting to 81 40, and on these dues
payments he gains $500, namely:
Value Of shares 5000
Diles paid I,4lol
0ain.. ....... .... $500
This difference comes from the oompul-
sorry saving Of the monthly dues. lis.
true that the borrower by the straight
mortgage plaa only only the interest
Of $40 a month, and it is possible mott
probable) for him to set aside out Of hist
earnings another $40 every month for twelyel
years and gain on these savings $3.50, giving5
him enough to pay off his mortgage at theS
end Of the time named. But there is mott
one borrower in 10000 that would do any (
thing Of the kind There are too manyx
things reaching ont Tor that identical S10&
every month, and it is quite certain that
when the twelve years rolled around theH
straight mortgage borrower would still oweN
the s., 600, and have nothing in hand tdl
show as an Offset for the $40 a month that
he might have saved. He would still havel
a s., 900 mortgage on his home while the
building association borrower would own
his home, free Of debt Experience has
demonstrated over and over again that the
difference between these two accounts at
the end of twelve years is as follows
Building assoeiation borrower,
one home free of debt. valued ............ 5000
Straight mortgage borrower:
In debt for mortgage. 5000
Is II not t,ue fiat If A owns 50 ono and
r is in debt for So 00O that 4 is ahead of
r inst 81 a0np Dnring the Twelve wears
nas,ed X has bsan sfafea +hat 4 na;d o,,t
q ia more tban r Rnt eya,, r + i
4bat p GOT q d5a ,,-ortl, of
,leas,,ra ant ~ tba roo,,e1, 4bat 10 canld
baTe ss,ed Int sne,,t etii1 i for sbaas
If lin ~ foIlo,ssi 80 ''''s'
o
i, So - si 10
Positive diiterenee. --.,,-.---..... $3.50
Building associations We're. organized by
men who had tried in all manner of ways to
save with regularity money to pay off
mortgages on their homes, and every time
they made the trial they met with failure.
Not only did they not save towards the
principal, but even the interest money
found its way out Of the stocking, and
when the bill for the interest was presented /
every six months the stocking was always
Lighter than it should have been Men
needed scheme that would take 6heir
interest every. month and also take part of
the principal This they found in the
building society.
Frequently building association accounts
are made difficult to audit because the cash
statement on the printed report shows larger
receipts and larger expenditures than the
figures on the cash book. When the auditor
notices such a difference, he, Of course,
asks for an. explanation, and then a long
argument follows as to the proper way Of
making ont statements. 1t is conceded I
that the cash account on the report should /
agree precisely with the cash account of
the association
a society may hold a mortgage on a
property winch 1t IS Obliged 70 foreelose.
The mortgage may be Tor 81 ,1OD. The 4