BUYING TO BUILD

Evening Star, Issue 22383, 6 July 1936, Page 2

BUYING TO BUILD

STATE ADVANCES TERMS . MINISTER CLEARS MISUNOERtTANMM [Pee United Press Associatio*.] WELLINGTON, July 4. A warning to intending purchasers of building sections who contemplate applying lor Government loans was issued by the Minister of Finance, the Hon. W. Nash. “ It has come to the notice of the Government that a number of people, in their desire to build their own homes, are now negotiating for the purchase of sections of land on terms requiring the deposit of a certain amount of cash in each case in the expectation that their homes will be eventually financed by loans from the State Advances Corporation.” said Mr Nash. “It is not generally understood that every advance on mortgage is secured on the land which includes all buildings erected on it. There is an erroneous impression that a loan _ is granted only on the house and section and can be pc id off by instalments independently. The true position is that when a loan is made available the balance still owing on tbe sc-tibn baa first to be paid out of the loan. In such cases onlv tbe remainder of the loan is available for tbe payment of the cost of house. _ Tbe applicant, therefore, will he required to find the rest of the cost of the house out of his own money, and this, .as previously stated in the case of State Advances loans, cannot be provided by arrange ing a second mortgage unless the corporation consents in writing.