The Washington times., 1929-06-03
Help For the Man Who Wants to Build
Determining Cost
Of Borrowing for
Building Purposes

BY The Architects Small
House Service Bureau Of the
United States, Inc.
If the family about to buy or
build q home has an account in q
building and loan association. or q
savings bank which it knows has
served other families satisfactorily,
the problem Of choosing an agency
may be simple one. In order to
obtain the best service and the low
est actual rate for the type Of loan
best suited to its requirements,
however, q family may have to
shop around" and compare the
loan plans and rates Of the vari-
GUS agencies and the service they
render.
The long-term amortization loan
Of the building and loan as
ISOLATION or life insurance COM
pany helps to assure eventual debt
free home ownership and enables
the home owner to avoid renewal
charges, but where there Is sec
ond mortgage to be amortized such
q loan plan may not be feasible In
the beginning. Some first-mortgage
companies lending on long-term
amortization basis, however, are
willing to allow the mortgage to
run as q straight loan until the sec
ond mortgage has been taken alp.
Look for Honest Agency
If premiums or commissions are
charged, the borrower should, Of
course, consider them as additional.
interest payments and take into ac-
count the true rate he pays. He
should also consider that under
some plans Of loan repayments the
real interest rate is considerably
higher than the advertised rate.
Unfortunately, the plans Of some
agencies are purposely made COM
plicated in order to conceal the
true rate charged.
Careful inquiry among persons OF
standing in the community will usu-
ally lead the borrower to an hon
est and reliable agency which offers
reasonable rates and terms. What
may be equally important Is the
sound and helpful advice based on
knowledge Of local conditions and
the problems of home owners which
a sympathetic lending agency rem
ders.
Only q few Of the many ser
vices are making sure Of the title,
seeing that all back taxes and Spe-
cial assessments are paid, that
there are NO mechanics liens or
other claims against the property,
placing insurance, and making q
contract with n builder. Then there
are such questions as the size Of
payments q family may safely un-
dertake in view of its income, esti-
mating home-ownership expenses,
the possibility of special assess
ments, the course Of real estate
values and trends which may affect
the character Of the neighborhood,
on which the lender may give help
full counsel.
Make Sure Of Charges
IF a purchase Is to be made under
a land contract, the buyer should
satisfy himself as to the reputa-
ton and financial standing of the
seller. In this case, rs well as in
the case where the financing Is
handled by means Of mortgage
loans, the buyer should also deter
mine to what extent financing
charges are included In the selling
price Of the property.
The prospective home buyer with
q small amount Of cash, who must
pay, directly or indirectly, . large
financing charge In connection with
o second or third mortgage or land
contract will do well to ask him
self whether or not 1t would be wise
to defer the purchase until he has
saved enough to make a more sub
stantial down payment and reduce
the financing cost.--Copyright 1929.
The Architects Small House Ser
vice Bureau Of the United States,
Inc.