The Exeter Times-Advocate, 1964-04-23, Page 24Two-tone effect of Max Harness home, Huron St.
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TIMES-ADVOCATE HOME EDITION'
Now's the t me to make your plans
Stairway planter area provides interior 'air'
Legalities-and loans
The prospective home buyer is
often on unfamiliar ground and
understandably confused when
faced with the technical and legal
terms involved in acquiring a
home.
You should engage your own
lawyer at the outset of your
negotiations to purchase . . . .
certainly before you sign any-
thing. It is not a good practice
to use the same lawyer as your
builder or your mortgage lender.
The lawyer of your choice will
safeguard your interests and ex-
plain the transaction to you.
Very often, home buyers blame
a builder unjustly for misunder-
standings over responsibilities,
when the cause of the difficulty
has been their own failure to be-
come informed.
Despite the unfamiliarity of the
average home buyer with the legal
mechanics involved in the pur-
chase of property, the buying of
a home need not be an involved
process. Every reliable builder
will do his best to inform you
fully about the house, the neigh-
DOES IT PAY TO PREPAY?
Is it wise — or foolish — to pay
cash for your house or to pay
off a big chunk of the outstanding
mortgage if you have the money
available?
The answer: It all depends—
on finances, on whether you may
wish to sell in the near future,
on the investment return you
might obtain elsewhere, on the
level of inflation, on a lot of
things.
First fact to consider is the
money you spend on a house as
an investment. In order to ac-
quire the home you most likely
have to borrow money from
someone else. Each month you
will pay them back a little of
this money although with interest
and amount you still owe them.
It stands to reason that during
the first few years of your oc-
cupancy, when the balance yet
to be paid is still large, a much
larger proportion of your month-
ly payment is going for interest
than for the principle of your
debt. Therefore, the earlier in
the life of your mortgage you
pay off a big chunk of the out-
standing principle, the more in-
terest you save.
PREPAYING LOANS
With some mortgages, it isnot
possible to prepay a portion of
your debt anytime you wish. This
constitutes a change in the terms
of your agreement with your lend-
er, and he has been counting on
you to adhere to these terms for
the life of the loan.
On conventional mortgages,
lenders' policy varies and are
sometimes flexible. Some charge
a penalty for prepayment. Others
restrict the time and amounts
which you can pay in this manner.
The cost of any penalty would
have to be weighed against your
savings in interest to discover if
it will be profitable for you to
make such a payment.
PREPAYING NHA LOANS
With a National Housing As-
sociation loan, you have the right
to pay off 10% of principle amount
of the loan on the 12th install-
ment date; another ten percent
on the 24th installment date; and
the entire outstanding on the 36th
or any subsequent installment
date.
If you do make the prepay-
ment on your outstanding prin-
ciple, however, your lender has
the right to charge you 3 months
interest on the amount you pay
off. He can waive this charge if
he wishes, though, and can also
accept prepayment over and
above those set in the mortgage.
When you make prepayment of
your principle, your subsequent.
mortgage payments usually re-
main the same. Thus you would
end up paying off the mortgage
earlier than the original terms
called for.
A basic point to keep in mind;
it is the lenders' money that is
-- Please turn to page 14
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