14 



BULLETIlSr 968, U. S. DEPAETMEjSTT OF AGEICULTURE. 



Table VI. — Purchasers classified according to promotion of price raised on 

 second mortgage and relationship to former owners. 



[Giving of mortgages coincident to the purchase of farms, and first mortgages held by Federal land banks.] 





Number 



of 

 records. 



Per cent 



ofaU 

 records. 



Holders of second mortgage — 





Former owners. 





Per cent second mortgage is to total cost of the farm. 



Related 



to the 



pm-- 



chaser. 



(32 

 records). 



Not 

 related 

 to the 

 pur- 

 chaser 

 (388 

 records). 



Not 

 former 

 owners. 



(107 

 records). 



lto25 



167 

 157 

 105 

 98 



32 

 30 

 20 



18 



Per ceni. 

 10 

 34 

 25 

 31 



Per cent. 

 26 

 30 



22 

 22 



Per cent. 

 60 



26 to 40 



27 



41 to 50 



9 



Over 50 ... 



4 







PERIOD OF REPAYMENT OF SECOND MORTGAGES. 



By placing as large an amount of the cost of the farm as possible 

 on first and second mortgages, the purchaser who is short on cash 

 husbands his resources so that he may have enough on which to 

 operate his farm. But the conditions of repayment on his mortgages 

 should be such that he will not be embarrassed in meeting the pay- 

 ments. 



On the first mortgage given to the Federal land bank he must pay 

 6^ per cent each year (if the mortgage was given on or after Decem- 

 ber 7, 1917), this amount sufficing to pay the interest due each year 

 and to reduce the principal so that in 34^ years both principal and 

 interest will have been fully paid. The payments on the Federal land 

 bank loan are made annually or semiannually, and the comparatively 

 small payments to be made at any one time should not embarrass the 

 borrower. 



Table VII shows the time by which the second mortgages were 

 found to be fully payable as shown by 576 second mortgages made 

 in connection with the purchase of farms on which loans on first 

 mortgages were obtained from Federal land banks. Two out of every 

 10 of these second mortgages were payable in full by the end of the 

 second year and seven out of every 10 by the end of the fifth year. A 

 larger number of second mortgages were payable in full by the end 

 of the fifth 3^ear than by the end of any other period, 29 per cent 

 having the fifth year specified as the date of final payment. Only one 

 out of every 20 was not fully payable by the end of the tenth year. 

 A larger proportion of the buyers who borrowed on second mortgages 

 from relatives were allowed longer than two years than in the case 

 of those who borrowed from others than relatives, and a larger pro- 



