(By F. W. Nicolls, M.R.A.LC., Director of MHousing) The average citizen not engaged in the construction indusiry buillds posâ€" sibly one housso during his lifetime, therefore, it is an uncertaking which might be termed as an experiment and should t done without competâ€" ent advice and knowledge of what to do and particularly winat not to do. The problem of design and construcâ€" tion may safely be left in the hands of competent architects and builders who specialize in house design and construction but the question of finâ€" The D. H. A. Will Help You toa Home of Your Own by Payment Plan ancing is another problem. Houses are financed by cash or credit. The prospective hous»e owner who has cash available in a sufficient amount to finance his entire house has no problem whatever, but as this occurs in so few cases we can disregard this possibility and consider the methods of financing when it becomes necesâ€" sary to use credit. There are soveral forms of credit available for builders of which the mortgage is by far the most popuâ€" lar in Canada. Land contract, purâ€" chase agreement, tluilding societies, building and loan associations, are used extensively in other countries but are not common in Canada. How to Finance Building ot a Home of Your Own There are two forms of mortgage financing, first, the ordinary mortâ€" gage in which the borrower borrows a definite sum repayable in full on a fixed date, usually five years or less; second, the amortized mortgage usually for a period of ten years in which the monthly, semiâ€"monthly or annual payâ€" ments include a blended payment of interest and principal. Up to a short time ago mortgages in which payments are not systematically amortized were the favourite method of house financing. The program usuâ€" ally consisted of a first mortgage and very often a second morigage. The first mortgage was limiteda to 60 per cent. of the value of the house, as a mortgage in excess of 60 per cent. was not a legal investment for triust funds, PaACGE Dominion Housing Act Now Applies to Timmins and Disâ€" trict. Director of Housing Explains Provisions of the Act and How the Man Desiring a Home of His Own May _ Benefit. and PHONE 43 trust funds formed the bulk of HAULING n » PROLEC LE YOUR INVESTMENT with BY EXPERIENCED MEN When you invest several thousand dollars in a home be sure it 1s thorou;,hl\ protectedâ€"not only against weather damage but fire as well. FIRE RESISTING AND LASTING Toronto Asphalt Shingles are surfaced with fireproof granules. They give vital fire protection from chimney sparks and flying embers. With Toronto Asphalt Shingles your home has double protectionâ€"protecâ€" tion from fire and protection from the most severe weather condiâ€" tions. They give years and years of satisfactory service. Call in and let us show you samples of this exceptionally fine roofing. Estiâ€" mates gladly given. If a reâ€"roofing job is needed it can be financed unâ€" der the Home Improvement Plan. If you are planning a new home ask about the Dominion Housing Act. FELDMAN TIMBER CO. Head Office Schumacher, Phone 708 CAREFUL 24 HOUR SERVICE itizen not engaged in indusiry builds posâ€" during his lifetime, in uncertaking which as an experiment and lone without competâ€" N IGHT The mortgage was usually made to fall due in fve years, at which time the borrower might or might not be called upon to make payment on principal, dependinz upon conditions at the time when the mortgage came due. If money was plentiful the borrow»>r usually had no difficulty in renewing the mortgage for the fuii amount. On the other hand, if money was scarce the borrow>r wculd be required to make a substantial payment, and this period of tight money frequently ocâ€" curred at a time when he was least able to make a payment. A large part of th> losses which have occurred durâ€" ing the recent depression can be traced to the falling due of mortgages and the inability to meet the conditions reâ€" quired for their renewal. the available funds for investment in mortzgages in Canada. The amoritzed mortgage came into vogrue in Canada with the passing of the Dominion Housing Act in 19368. Since then it has been growing in popularity. It represents sound finâ€" ancing and requir»s that the mortgage be amortized or reduced at a rate in excess of the physical depreciation of the house. It permits or loans being made to a larger proportion of the cost or value of the hciuse than could safely be made by an ordinary mortâ€" gage. With this in mind, Parliament, when it passed the Dominion Housing Act, decided that an 80 per cent. amorâ€" tized mortgage secured by a house of good design and sound construction could be under prevailing conditions as sound an investment as an ordinary 60 per cent. mortgage. Consequently, approved lending institutions under the Dominion Housing Act have authority to invest in joint 80 per cent. amortized mortgages. The necessity of a secâ€" ond mortgage is thus eliminated at a saving to the borrower of large disâ€" counts and high interest charges. It is conceivable that had a plan of mortgage financing such as that offerâ€" ed by the Dominion Housing Act been in effect during the boom period of 1920â€"30, houses built during that perâ€" iod would have their mortgages amorâ€" tized to such an extent that refinanâ€" cing during the despression would have been possible without loss to the borâ€" rower. + ' The wise borrower under an amorâ€" tized mortgage figures thal; only a part of his monthly payment goes toâ€" wards increasing his original investâ€" ment and that the balance of this payment is, in large part at least, in lieu of depreciation. A house is a physical property and as such is subject to depreciation. House owners should recognize this and set up a sinking fund to offset this depreciation. The average house owner neglects to do this and it is at this point that the amortized mortâ€" gage shows its merit by compelling the house owner to do what he should do of his own accord. There are two prime factors which tend to destroy an investment in a house, namely, depreciation, which is caused by time, weather and wear, and which to certain extent can be guardâ€" ed against by the proper use of sound materials: and obsolescence, which to a larg» extent can be guarded against by having the house properly located and designed and the material and equipment to be used specified by a competent upâ€"toâ€"date architect. Many houses are built today from plans in vogue in 1920, yet the owner would be insulted if you tried to sell him a 1920 automobile. It is true that there has been more progress and adâ€" vance in automobile design than there has in house design and yet progress has been made. Design, in competent hands has improved; houses are now designed for living. Limited appropriaâ€" tions have forced designers to study the actual needs of the occupants and design accordingly, Owners are payâ€" ing more atention to annual maintenâ€" ance cost, the superfluous ornament and the unnecessary space have been omited but these results can only Many prospective house owners are pron» to think that cost and value are one and the same thing. This is far from being correct. Cost is the aâ€" mount spent to produce the house. Value is what it is worth when comâ€" pleted. Cost is a matter of dollars and can be accurately determined; value is usually a matter of opinion as to what is the market value of the property. Appraisal of value may be made on the basis of "reproduction cost," which is the amount required to reproduce the house; "value for luse," which is what the particular house is worth to the owner who does not have to sell to a buyer who does not have to buy, or "value for sale," which is the amount the house will bring at a forced sale. In the case of foreclosure, where propâ€" erty is sold, it becomes a forced sale. In other words the owner must sell but the buyer will only buy at his own price. This tends to reduce the sellâ€" ing price to a minimum and appraisers wh>n considering thevy alue of a house must keep in mind the possibility of having to foreclose and sell. The reâ€" sult is that unless the house is of a type that will attract the average prosâ€" pective buyer, the appraised value must be conservative. The bailder who constructs a house costing $10,000 among houses worth $5,000 has overdeveloped the property and nerd not expect to have his house valued or appraised at anything like cost. The house must fit the surroundâ€" ing neighborhood. be secured by painstaking architects ind competent designers. Likewise, if a builder constructs a hcluse of antiquated design or material, or embodyving features of no possbile value to an average prospective purâ€" chaser he should not expect an apâ€" praisal equal to cost. It is essential that a prospective house builder have an equity in his house. Under a Dominion Housing Act mortgage this be at least 20 per cent. and may be required to be 25 per cent. or 30 per cent. This is the owner‘s investment in the house and sound lending practice requires that the prospective owner be ready, able and willing to invest this equiy before the lending institution is callâ€" ed upon to advance to the owner or builder the proceeds of the mortgage. One of the greatest advantages of a Dominion Housing Act mortgage is Mill Office Timmins, Phone 709 THE PORCUPINE ADVANCE, TIMMINS, ONTARIO How imluch can a prospective house owner afford to spend on his home? His total investment should not exâ€" ceed two or at thr most two and oneâ€" half times his annual incoms. Twice if he proposes to finance his home with a large mortgage, or possibly two and oneâ€"half times if he is in a posiâ€" tion to make a substantial down payâ€" ment. It is also a reasonably safe asâ€" sumption that it will cost about one per cent. per month to occupy the house when completed. The selection of the site is allâ€"imâ€" portant, and before it is purchased it woulid be wise to have a responsible lending institution official or realtor who is familiar with the growth of the district check up for past and futâ€" ure development. Find out all about restrictions and taxes, check for disâ€" ance to schools and transportation, public services, ete.. Then when you have narrowed the choice down, call in your architect, tell him the style house you prefer, and he will help you to choose the site best suited to the house of your choice. Lending institutions have very deâ€" cided prejudices based on policy and experience. Nor have their experiences been all alike. Therefore, som» lending institutions will make loans in disâ€" tricts in which others will not conâ€" sider because their experience in that particular district has been favorable. Som>» lending institutions as a matter of policy will not make loans in the country. They feel that, if it ever beâ€" comes necessary to foreclose and sell a house in the country, the possible number of purchasers is so0 limited that it may not be possible to dispose of the property except at a loss. If the experience of stitution in the past when properties were re An a@ppraiser must make an appralsâ€" al of your building site and the house that you propose to erect. An inspecâ€" tor must make a number of visits to the house during construction to see that the house is being built as the own>r and builder promised to build it. There are certain expenses in conâ€" nection with financing of a house. An attorney has to search the title to the property and prepare the mortâ€" gage. A surveyor may have to make a survey.. There is also the interest on borrowed capital until the house is completed and the taxes on the land during the period of construction. It is impossible to determine definitely what these expenses will amount to but an allowance of two per cent. of the amount of the mortgage will not be far out. be Tar out. The prospective house owner who requires assistance to finance his house should, therefore, look first for a site which meets his requirements and then see that his house is properly designed to meet his needs and of modern and appropriate materials. It should be interesting to the prosâ€" pective builder to learn something about how lending institutions arrive at a lending value in order to deterâ€" mine how much they will lend on mortgages. Different lending institutions use different systems and methods to arâ€" rive at th> same result, namely, fair and reasonable lending values. The system described is that in use by the Dominion Housing Act Administration and, in brief, is as follows: On receipt of a lodn application from a lending institution the plans and specifications are checked for compliance with the Minimum Standâ€" ards of Construction and Memoranâ€" dum Specifications. If the house comâ€" plies with these requirements an estiâ€" mate of cost is prepared. If this estiâ€" mate compares favorably with the owner‘s cost and the lending instituâ€" tion‘s appraisal, the reproduction cost can be readily determined, but â€" and here is where some houses failâ€"the nouse must now pass a test for ratâ€" ing to determine the appraised value. The subjects covered by this rating afâ€" fecting the site are: Neighborhood, future development, transportation, distance from business and educational centres, restrictions, detrimental influâ€" ences, etc. The hcuse also must have a satisfacâ€" tory rating when checked for efficiency 12 lending iIinsUILUUION. nts are usually paid rnience than semiâ€"anâ€" ind fit in more readily ‘s income, thus assistâ€" ing a monthly budget. »ly more important is is actually building up unt, paying him five prospective house on his home! it should not exâ€" most two and oneâ€" of plan, architecture, materials, equipâ€" ment, frcedom from excessive mainâ€" trnance. depreciation, and obsolesâ€" cence, adaptability and suitability to nsighborhood, layout and surroundings and future sales value. If the house will pass these requireâ€" ments the borrower need not worry as to the financing of his future home but there yet remains a rather im â€" portant feature. A mortgage is a Ccovâ€" F1 enant to pay a certain amount of money at a certain time. The actual property is merely the security to guarâ€" antee performance of the covenant, therefore, the promise of the borrowâ€" er. his reputation for fulfilling his promises, together with his ability to repay the loan is of prime importance to a lending institution. 7 Lending institutions do not want property, they want their loans repaid when due, and unless the borrower‘s reputation is such as will convince the lending institution that he will repay and his earning ability is such as will convince the lepding institution that he can repay, the best security available will not enable a prospective borrowâ€" er to secure a loan. The cost Oof living in a house is as important as the cost of construction, the two costs are closely related, a sucâ€" cessful hcluse strikes a balance beâ€" tween first cost and annual cost. If we assume 20 years as the econoâ€" mic life of the house, it is safe to figure that the house will be a dimâ€" inishing security for a loan over that period of time. We should, therefore, figure that the loan must be amortized completely in 20 years. With $900 in cash you could build this $4.500 home (house $4,000: lot $500) in Timmins. The balance could be paid off in ten vears, under the Dominion Housing The average borrower gives little thought to the amount of money spent for the use of borrowed capital over the economic life of his house. Over a period of 20 years this will amount to 57 per cent. in the case of a Dominion Housing Act amortized mortgage. In the case of a straight five per cent. mortgage, renewed in full for a total period of 20 years, it would amount to 100 per cent. plus the renewal fee, and while it is not reasonable to expect a lending institution to make straight loans for a period of 20 years without requiring reduction of principal, these figures indicate that the amortized mortgage is the cheapest method of financing your home Under Canadian laws lending instiâ€" tutions are not permitted to make mortgage loans in excess of 60 per cent. of the appraised value of a house unâ€" less the lending institution has enterâ€" ed into an agreement with the minister of finance and become a napproved lending institution under the Dominion Housing Act, then they are permitted to make ijoint mortgages with the Dominion of Canada in amounts equallâ€" ing 70%, 75% and 80% of the cost of construction of a house or its appraised value. whichever is the lesser. Briefly summarized the procedure to be followed in financing a riew home after you have determined how much ‘H ‘GU 4JO SYMLMYS SYMDNYVAGUY XHJL NJ YIHHLONYV Pro1t PLAN Bb at t 6t Woar/rmg DemmgSs o Tais moursa Atkrn By TWE GoreenmeENF FRar ree Mmecmirszer RAND R Cotme£kIF SE consisring on 4 Sars oc Busk #no 4 Dovmior MHousme (Fo ba Euk) â€"~ ar me § AumiokR) rmy Bf Purcenmnasko FOnr rmae se Of ;’/0 OO Qoniniond RMousing Oeosnr B MemsBre â€" Dr2»kyresr~r s FINANC E: [ 9 _ vr»J BA Cl ‘ you can afford to invest and how much you can pay annually, is as follows: istâ€"choose a suitable site in a disâ€" trict protected from detrimental inâ€" fivw>nces and satisfactory to the lendâ€" ing institution; 3raâ€"consult your architect in the selection of the builders whom you will employ to construct your new home; 2ndâ€"choose your architect with care and have your plans and specifications prepared ; 7"thâ€"if, and when, your loan is apâ€" proved you are ready for construction and you may be assured that if you have followed the above advice you have done everything humanly posâ€" sible to assure yourself of a satisfactory home. 4thâ€"tabulate the cost of the entire project includingâ€"(a) land, (b) house, (c) equipment, (d) architect‘s fees, (e) financing cost; 5thâ€"pr>sent these figures to the lending institution and make formal application for a loan. Be prepared to furnish the lending institution with all bids, costs etce., and also complete inâ€" formation as to your ability to repay the loan; 6thâ€"be prepared to grant the lendâ€" ing institution sufficient time to check everything carefully and arrive at a decision. This will ordinarily take from a week to a month; (‘The New Yorker) One of the patrons of a Cape Cod drugstore is a wireâ€"haired fox terrior who comes in almost every afternoon, hops up on a stool, puts his paws on the counter, and barks twice. That‘s a signal for the soda clerk to dish up a double portion of vanilla ice cream, which he gives the dog after removing fifteen cents from a purse attached to his collar. The terrier laps up his ice cream as neatly as any summer colonâ€" ist, utters one grateful bark, and patâ€" ters contentedly out of the store. Second flook PuaA®n ‘ox Terrier Orders His Own Ice Cream in Drug Store on First Mortgages Available in REAL ESTATE INSU STEAMSHIP OFFICE 20 Pine North Timmins mot Forwak dwg OW T k TIMMINS SCHUMACHER SOUTH PORCUPINE Paid Back Monthly over 3 to 5 Years. APPLY TO ERowaro CEc.. COXL MR A|C onei. Hovuse Design M2 I47 PFO Y J KE /Â¥ Act at $37.98 a month. This design is governmentâ€"approved and is the second of a series of D. H. A. homes being pubâ€" lished by The Advance. INSURANCE Phones 1135 15809 A. APPROVED PLANS Temiskaming Crops Now in Fine Shape, Due to Rain The Northern News of Kirkland Lake last week had the following :â€"*‘"The need of a swimming hole or pool in town was stressed before council Tuesâ€" day night when it came out that high water at a point in Murdoch Creek, where it is little better than an open sewer because the youngsters of that area block up a culvert in orâ€" der to have a swimming hole in the southern part of the town. A proâ€" perty owner told council that the water smelled very bad, and that he was losâ€" ing tenants on that account. He added that one youngster had fallen in and had nearly drowned. The doctor had worked on him for some time before bringing him around." Kirkland Lads Block up Culvert for Swim Pool Try The Adveance Want Advertisements At a mecting Of Uhne DAaVSs Committee of the Silksworth Colliery in Durham County, it was stated that during 1937 the miners bought at the baths canteen, in addition to other commodities: 51,584 pints of milk. 46.349 bottles of mineral water 140,000 pots of tea. 35.812 bars of chocolate. 35,618 pies. 4324 lbs, of sweets. £1.761 worth of tnabaceo and cigarettes What Miners Drink and "at in Durham County THURsSDAY. JUNE 30TH, 1938 T‘iiv ncil that the water d that he was losâ€" iccount. He added had fallen in and The doctor had some time before he Pithead Baths ilksworth Colliery it was stated that ers bought at the widition to other +m *J