FARM MORTGAGE LOAlsTS BY BANKS, ETC. 21 
TERM OF LOAN AND METHOD OF REPAYMENT. 
Farm mortgage loans by banks are usually made for relatively 
short periods of time. Only rarely do such loans run for a period 
as long as 5 years. Insurance companies make loans as a rule for 
somewhat longer periods of time. Of 182 insurance companies which 
gave information on this question, 102 stated that the terms of 
their loans were not over 5 years; 72 that they loaned for not over 
10 years; and 6 that they had some loans of more than 10 years 
maturity. Of 65 mortgage bankers who reported on this question, 
34 stated that the terms of their loans were not over 5 years; 27 that 
they were not over 10 years; and 4 that some loans were for more 
than 10 years. 
On the question of the method of repayment of loans, 177 insurance 
companies and 61 mortgage bankers reported as follows: Thirty- 
three insurance companies and 8 mortgage bankers stated that their 
loans were straight loans to be paid at maturity; 17 insurance 
companies and 5 mortgage bankers that repayment was optional at 
any time; 18 insurance companies and 9 mortgage bankers that 
repayment could be made in whole or in part after specified periods 
of from 1 to 5 years. Eighty-four insurance companies and 34 
mortgage bankers stated that payments could be made on the prin- 
cipal on any interest date, in multiples of from $100 to $500, or one- 
fifth or one-tenth of the principal in any one year, after the lapse of 
a certain period varying from 1 to 5 years. Nineteen insurance 
companies and 1 mortgage banker stated that certain annual pay- 
ments were required, sometimes specified as $100 to $500, or one- 
fifth or one-tenth of the loan, while 6 insurance companies and 4 
mortgage bankers reported using the amortization plan of loans 
running for 20 to 30 years. 
CONCLUSION. 
While the increase in farm mortgage indebtedness during the last 
decade, as indicated on the earlier pages of this bulletin, appears 
almost startling, such increase is not in itself a cause for alarm. 
It is rather a logical result of increased market value of farms. The 
increase in these values, in turn, reflects better farm incomes during 
the decade in question than prevailed during preceding decades, 
these incomes being to a considerable extent invested in added 
permanent improvements in the form of buildings, fences, silos, and 
drainage and irrigation systems. 
A very considerable percentage of farm mortgages are the result of 
land transfers, the mortgage, like tenancy, forming a rung in the 
agricultural ladder leading to farm ownership. The size of the 
mortgage naturally tends to bear a direct relationship to the purchase 
price of the farm. 
