16 



BULLETIN 874, U. S. DEPARTMENT OF AGRICULTURE. 



while somewhat more than half the purchases involved indebtedness 

 of 65 per cent or more. 



In the great majority of sales involving a mortgage there was only 

 a first mortgage. In many cases, even when the amount of mort- 

 gage indebtedness was greater than 50 per cent of the sale value, the 

 entire indebtedness was carried on a first mortgage. Since the estab- 

 lished credit agencies will not ordinarily lend on so large a margin 

 of the value of a farm, such mortgages were usually carried by the 

 seller. Out of a total of 820 first mortgages it was found that 141 

 were for 75 per cent or more of the sale price, while 536 were for 50 per 

 cent or more, the average of all first mortgages being 56.4 per cent. 

 About one-fourth of the sales involved a second mortgage, which aver- 

 aged 32.2 per cent of the sale price. In 10 cases the second mortgage 

 covered 60 per cent or more of the purchase price, and in 68 cases 40 

 per cent or more of the purchase price. Such cases, however, probably 

 represent instances where an existing first mortgage had been ar- 

 ranged with some credit agency at a lower level of value and the seller 

 found it necessary to assume a very large part of the increase of value 

 as well as a considerable margin of the old value by taking a second 

 mortgage. 



Table X is a summary of the duration of loans in the case of 701 

 first mortgages for which this information was obtained. 



Table IX.- 



-Number of purchases involving mortgage indebtedness, classified by per cent 

 of indebtedness to purchase price. 



Number of 



farms 

 purchased 

 involving 



mortgages. 



Percent of mortgage indebtedness to 

 purchase price. 



Per cent of 

 all farms 

 purchased. 



110 

 333 

 265 

 131 





13.1 

 39.7 

 31.6 

 15.6 



6"i and under 80 



50 and under 65 







839 



100.0 







Table X.— First 



mortgages, 



classified by duration 



of loan. 





Number 

 of years 

 to run. 



Number of 

 mortgages. 



Number 

 of years 

 to run. 



Number of 

 mortgages. 



Number 

 of years 

 to run. 



Number of 

 mortgages. 



Number 

 of years 

 to run. 



Number of 

 mortgages. 



1 



2 . 

 3 

 4 

 4t 



6 

 12 

 35 

 27 



1 



5 

 6 



7 

 8 

 9 



246 

 15 



27 

 27 

 11 



10 



11 

 12 

 14 

 15 



241 



5 



4 



1 



26 



16 

 20 

 25 

 30 

 33 



3 

 9 

 1 

 1 

 3 



It appears from Table X that there is a strong tendency to make 

 mortgages either for 5 years or for 10 years^ nearly 70 per cent of the 

 first mortgages being about equally divided between these two 

 periods. 



