The Rural Voice, 1992-06, Page 24FARMGATES
FEEDERS
FEED WAGONS
F.
RUGGED DEPENDABLE
RELIABLE
3 models • 1" square tubing
• 1 1/4" square tubing
• 1 1/2" round pipe
CHEAPER
FIELD GATES
nli1m1♦woif
ipli111111111 1
7' X 8' Single Bale Feeder
for 4' and 5' round bales
and larger sizes available
+.r
l ��i.6 tis
Usti t
IC
Econo Model Feed Wagon
For further information call:
Owen Martin
Manufacturing
HAWKESVILLE, Ontario
519-699-4144
20 THE RURAL VOICE
Professionally Speaking
Shopping for a mortgage?
Which Interest Rate Is Better?
by Phil Krauter
One of the most fascinating
aspects of using money is
that it both earns and costs.
In other words you can
invest your money in a
growth situation so it earns
additional money (interest)
or you can borrow from a
lending institution in
which case you must pay
(interest) for the use of
someone else's money.
Almost every day
people have to make
decisions about money in
their personal or pro-
fessional lives. Sound
financial decisions call for
a close look at the way
money works and a comparison of
the options that are available.
The amount of interest paid
depends on:
1. The amount of money involved
(called principal).
2. The interest rate.
3. The length of time the money is
borrowed for.
4. The way the interest is
compounded.
5. Frequency of payments.
When shopping for a mortgage, it
is important to understand the
difference between the stated interest
rate and the effective interest rate.
STATED ANNUAL RATE
Interest rates for mortgages are
often quoted as an annual rate with
monthly, quarterly, or semi-annual
compounding. This tells you the rate
for a specific period of time, usually
a year.
EFFECTIVE INTEREST RATE
Effective interest rate is the actual
rate of interest per annum after taking
compounding into account. If there
is a difference between the number of
payments per period and the number
of compoundings per period the
effective rate will differ from the
stated rate.
In order for you to get the best
deal when shopping for a mortgage,
you should ask your lender
the following questions:
1. What is the stated rate of
interest?
2. How many compound-
ing periods are there
annually?
3. What is the effective rate
resulting from the number
of compounding periods?
READ YOUR
DOCUMENT
CAREFULLY
Both the Mortgages
Act and the Interest Act
require that mortgages state
the interest rate and whe-
ther interest is calculated
yearly or half yearly, not in advance.
SECURITY
Long-term loans are usually
secured by a real estate mortgage
with a specific term and interest rate,
and subject to the Mortgages Act.
However, sometimes you might be
asked to give a note as prime security
and a real estate mortgage as
collateral security.
FEES FOR SERVICES
Some lenders absorb the costs of
various services as part of the interest
rate being charged; others charge
specific fees for work done in
connection with a loan.
Find out the practice of your
potential lender, for appraisal fees,
legal fees, partial discharge fees,
discharge fees, and issuing statements
of your account. There may be fees
for assessing your financial records
each year while you are a client.
Know what the fees will be before
committing yourself.0
Almost
every day
people
have to
make
decisions
about
money...
Professionally Speaking is a monthly
column featuring a different expert
each month. This article has been
provided by Phil Krauter, Assistant
District Manager of the Farm Credit
Corporation in Walkerton.