MORTGAGE MONEY
A TIGHT MARKET
AMPLE SECURITY REQUIRED.
Whereas there is said to be "plenty of money about," investors are showing a reluctance to part with it, excepting on the most tempting security. "And they want bricks and mortar,"' said a wellknown estate agent, discussing the situation with a member of the "Star" staff to-day, tossing his hands towards a valuable block of city property. "I have not heard of many people losing their homes- ac the result of the mortgagee foreclosing,"' he replied in answer to a question on this point. "Of course, where people have had ridiculously large mortgages on their places they have not been able to renew them."
It was learned that private financiers would not now advance more than SO per cent on house property, whereas a little while back it was the usual custom to advance CO per cent. It was as a result of this tightening that values had fallen somewhat, but it was emphasised that the present depression is only temporary, that values should fully recover, and. in many parts of Auckland, even greatly exceed their former value. Meantime, it is admitted that "times are hard," and that many people have experienced great, difficulty in financing their homes when mortgages became due. Some solicitors have available a lot of money in small sums to invest on behalf of clients, but they state that much of the security offering' is not good enough for the risk. The trouble is, as far as the wageearner is concerned, that the man who bought a house at, say, £1200, putting down a deposit of £200, and giving a mortgage for the balance of £1000, finds himself in an awkward position when the mortgage is due at the end of three years. He has found that the payment of £65 a year in interest, with rates, etc., added, has been as much as he could manage, without reducing the principal. At the end of the period, therefore, he has £1000 to pay, if the mortgagee will not renew, and he can only raise £600 on his security. This system of finance is very unsatisfactory to the man who has put down £200 or £300. which may have taken years to save, and it should be a lesson to buy on better terms.
"The long-term loan, repayable, principal and interest, by weekly or monthly instalments, is the* best financing for the man who is buying a home," declared another agent—"although I say it myself, who oughtn't, for I have all classes of property to sell. But the man who buys a house with a heavy mortgage, knowing that he will l>e unable the principal by any appreciable margin, and without the certainty that he can have the mortgage renewed, does not show much wisdom, in my opinion."
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Bibliographic details
Auckland Star, Volume LVII, Issue 143, 18 June 1926, Page 4
Word Count
469MORTGAGE MONEY Auckland Star, Volume LVII, Issue 143, 18 June 1926, Page 4
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