Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1929-02-03
INTEREST IN
CONTINUED from Page one.)

t01ARAAnAE4 ALum rage OnG.t
receive q fair return on their invest
ment, while at the same time helping
people to buy homes of their own.
Each building and loan associa-
tion tthey are called savings and
loan associations or loan and saw
ings associations in some places has
its own method Of operation, but in
one particular they are abralike. All
OF them lend money on first mort
cages, repayable on the monthly pay
ment plan. Most Of them expect the
borrower 10 pay at least one per cent
Of the loan every month. and the
wise borrower will try to pay a little
more than this. The more he can
comfortably pay on his loan, the
sooner he will be out of debt, and
the sconer his home will become his
very own.
For example, IL a purchaser wish
IS to buy a home worth $4,000 at q
conservative appraisal, the building
and loan association will lend him
about $500. He must provide the
other $1,000 from his savings. or
perhaps can mortgage part Of il from
tAG ttAtA VI tnC lUu1tr "a GtAANA
taking back a second mortgage to
cover the amount which is not pro-
vided in cash. The less there is TO
borrow on second mortgage, the bet
ter of course, as second mortgage
rates are higher than fi-sts, and
only a limited number Of building
and loan associations primarily in
eastern Pennsylvania make second
mortgage loans.
Take First Mortgage
"For the $500 loan, the building
and loan association will take back a
first mortgage on the property, the
money Is advanced when all the pa
perS ere in order, the seller gives
up possession, and the buyer moves
in. OF course there must be a good
title TO the property upon which the
first mortgage can rest There must
be adequate fire and windstorm in
surance 70 reconstruct the building
il it is damaged. There must be no
other claims ahead of the building
association mortgage.
"To make certain that these things
are all cared for, q loan fee or COM
mission is charged by many assoeia-
tons, which, for a $500 loan may
range all the way from $40 up TO
500, depending upon the expense 70
the association OF making the nee
essary Investigations and putting
the loan upon the books. This wide
range in costs depends upon local
conditions, appraisers fee, attorneys
fees, etc. In some cases the title
records are much more complex than
elsewhere, in others the mortgage
laws are cumbersome and must be
complied with, in others the distance
from the office Of the association to
the location of the property is so
great that il takes an unusual
amount Of time 10 90 out and inspect
il. In all eases the association
makes just as small a charge for
this service as il can, rs it's one de-
sire is to put its members into
their homes at the smallest possible
cost.
These loan fees are payable only
once-regardles Of how long the
loan has to run. This is because
the one contract provides also the
name Of complete repayment.
Borrower Pays
when the borrower moves in, he
begins at once to pay a regular
amount on his loan every month. For
our $500 loan, he will pay not less
than $500 each month. part Of
which is interest and part repays the
principal. II the interest rate is 6
per cent. il will take about eleven
and one-half years (139 months) to
pay off that lean with the regular
payments. IL the rate is 6 1-2 per
cent. the same payment will take
longer (1d4 months) or a higher
payment may be required for repay
ment in less time. If the rate is Z
per cent, a still larger payment is
erquired. If the loan is TO be paid off
in the same or less time. $4,000
would paw out at Z per cent IN $50
months; sS7.16 at z per cent in 120