Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1922-04-14
Terms Of Loan.
interests per cent.

Rate of Interest," per cent.
Terms of payment Amortization
plan running 80 years.
Borrower is required to make pay
ments which are equivalent to paying
Z per cent on his loan-t that is he
must pay $35 every six months for
each $1,000 borrowed. These semi-an-
nual payments are called amortization
installments and they not only pay
all the interest on the debt, but in 33
years pay off the entire debt itself
Beginning with the very first install
ment part of each payment is ap
piled on the principal reducing the
debt and stopping interest on the
amount so applied Inasmuch as the
amount of interest becomes less as
each succeeding installment is paid
the portion of these installments that
is applied on the loan grows larger
and larger with each successive pay
ment and consequently the debt is
reduced with increasing rapidity being
entirely paid up in 33 years.
Prepayment Privilege.
After the loan has run five years
the borrower is permitted to make
additional payments on the principal
or to pay up the loan in full on any
interest date. Until the principal is
all paid up the amortization INSTALL
ments must continue to be paid
promptly every six months.
Cost of Making Loan.
AS this is a cooperative system
each applicant for its benefits is re-
CURED to pay the cost of handling his
application and making his loan.
Part of the cost will be required as
an advance fee varying according to
the rules of the different associations
and the balance will be taken out of
the proceeds of the loan. Association
charges cannot exceed 1 per cent of
sthe loan and the charge of the Land
Bann will be from SIS to $25 ,.ccord-
ing to size Of the loan These fees are
required to cover cost of appraisals
and title examination. Abstracting and
recording charges are not included.
The expense Of making a Federal
loan is small and is not repeated
every five years as in old style mort
cages. The Federal loan need be made
but once in a lifetime.
Stock In The Association.
Each borrower is required to buy
stock in the association to the extent
of 5 per cent of the loan he receives.
This stock is his property and is
held by the association as collateral
to his loan. He shares in all dividends
of the association and when the loan
is fully paid up stock is repurchased
at its full par value
The stock bears the same double
liability" feature, which attaches to
stock in a National Bank.
Stock need not be paid for in adj
vance. Settlement for it can be taken
out of proceeds of loan.
Sale OF Farm And Loan Stock.
The farm may be sold subject to
the Federal mortgage, but if sold sub
ject to such mortgage the purchaser
must also purchase the loan stock.
Using A Federal Loan To Buy A
Farm.
The Farm Loan System provides a
low rate, long time, easy term mort
gage loan to the farmer 1t provides
an especially desirable form of loan
for the man who is just getting estab-
lished. 1t must be understood, how,
ever, that the borrower is obliged to
have some capital of his own and can
not expect to obtain a farm by using
only the capital obtained from Fed
eral loan. Generally the Federal loan
cannot be made for even half of the
value of the farm and it must be made
only on a first mortgage.
The seller of the farm should be
be willing to take a second mortgage