Evening star., 1935-02-19


It would cost you less than this If
the lending institution agreed to &C
cept q lower rate of interest than the
61z per cent maximum prescribed in
our regulations. For your own con-
venience, as well as for the protec-
ton Of the lending institution, your
new mortgage also would require the
monthly payment of taxes and fire
insurance, which might amount to as
much as $18 or $40 month. If the
refunding transaction Is carried out
by o lending institution other than
the one now holding your first mort
gage, you might be required to pay
o small service charge, averaging about
e2.S2 o month. After executing such
q mortgage, you could then dismiss
once and for all your worries about
renewals, and 90 ahead calmly max
ing your monthly payments on basis
comparable with rent.
Opportunity for Nom Home Owner.
Suppose again that you are not a
home owner, but would like to be. In
this case you might buy property
already finished, by giving an insured
mortgage for as much as 80 per cent
of the appraised value and paying the
remainder in cash. Your monthly
payments per 81 900 in this case would
probably be substantially smaller. since
both the maximum interest rate and
the insurance premium would be lower.
II you should wish to build house
h. k%a
somewhat similar, except that you
would begin by submitting plans and
specifications for the property to an
approved lending institution. The
lending institution would then apply
to the Federal Housing Administration
for commitment to insure mortgage
on the property when completed. With
such q commitment In existence, you
should have no difficulty in obtaining
such temporary financing as you might
need in the form of a construction
loan from any commercial bank.
Upon completion Of the property, the
mortgage would be executed and the
construction loan paid off from its pro-
ceeds.
Case Of Builder.
Suppose now that you are an opera
tive builder of integrity and financial
responsibility. Perhaps you would
like to build and sell dozens of houses.
In this case your course of procedure
will be very similar to that of the in
dividual wishing to build home BY
submitting plans and specifications
for each separate property, you should
be able to obtain as many commit
ments to insure mortgages as you
need. You can do this either for
properties for which you already
have purchasers. or for those which
you wish to sell later, or even for
those which you wish to hold and rent.
AL we require is that you shall be a
builder prepared to produce honest
values. and that you are possessed of
sufficient financial ability to take care
Of the mortgages yourself in case the
properties are not sold. When they
are sold, we require only that the pur-
chasers be persons well qualified by
character and prospective income to
carry the charges on the mortgages.
Suppose, finally, that you are a
banker, or o person charged with the
management of some other type Of
institution engaged in making resi-
dental mortgage loans. You will find
1t very much to your interest, If you
have not already done so, to apply for
and receive the Federal Housing Ad-
ministration's approval as a mortgage.
The first great advantage, of course,
Is in the superior safety of the in
sured mortgage. I shall not go into
detail as to this, but you may be sure
that In case Of default of an insured
mortgage the worst that could hap
pen would be the substitution of a
high-grade 3 per cent debenture for
The unpaid principal.
Foreclosure Advantage.
The second great advantage lies In
the fact that, If you are obliged to
foreclose the mortgage and take
possession Of the property, you will
not thereby find yourself in the real
estate business. You can collect the
insurance by turning over the prop