BUYING and owning a home is by no means solely a financial proposition. It is a business affair like being married, having children or getting an education. A home that you can call your own is a rock-bottom investment. Its interest return is more than the tangible yield in dollars and cents. It produces what the economists call "psychic income," that is, greater comfort, stronger family ties, all-around deeper satisfaction, and a fuller enjoyment of life.

Don't always be paying rent to some one else. Receive interest instead of paying it. Become independent and own the roof over your head. Every man's house is his castle. To own the house one lives in gives a feeling of security, independence and permanence that is worth almost any amount of sacrifice.

The great advantage of owning a home is that every improvement you make adds to the value of the property. If you have a wife and children you are making the best possible provision for them, and you will feel like a real citizen, because every important improvement in the neighborhood will add to the value of the home. A house owner studies civic problems; he wants to know "who's who" in municipal affairs, as he pays taxes directly out of his pocket, and thus local government is brought closer to him than in the indirect way of supporting it by paying rent.

Basic as it is, the buying of a home is no simple matter. The mere statement of the problem calls to mind visions of real-estate swindles, land fakes, intricate contracts, and other nightmares - enough to bewilder the average investor and frighten him back to his flat or rented house.

Ownership of a home is an ideal to which nearly every man and woman aspires, no matter what their station in life may be. "We have always wanted to own a home," writes one woman, "but have never felt we could afford it. How can we raise the money?"

Many fear to imperil the family fortunes in an experiment which may fail. Inexperience and ignorance concerning real-estate methods prevent many from ever trying to make the experiment. Many answer the question, "Shall we own a home, or pay rent?" by keeping on with the rent because they fear not being able to renew the mortgage when it falls due, or because of a suspicion that they are paying more for a house than it is worth.

But as a matter of fact the problem is not so confusing as it seems. It has all been analyzed and dissected and classified like any other problem, and thus we can get some order out of chaos. Experts who have studied the subject agree that there are about seven more or less distinct methods of financing the purchase of a home. The classification of C. M. Keys, formerly of the Wall Street Journal, made for The Ladies' Home Journal is perhaps the best:

"Purchase outright for cash.

"Half paid in cash and the remainder running on first mortgage.

"Twenty-five per cent. cash, fifty per cent. first mortgage and twenty-five per cent. second mortgage.

"Twenty per cent. cash, eighty per cent. building and loan association mortgage.

"Ten to fifteen per cent. cash and the remainder in monthly instalments.

"Home building corporation.

"Personal credit from friends, associates, life-insurance policies, etc."

It may be said at the outset that no plan of buying a house merits serious consideration that does not contemplate the payment of at least twenty per cent. cash down by the buyer. Indeed this is a minimum. Possibly one or two semi-philanthropic home building organizations, of which there are a number throughout the country, accept less than this amount, although Thrift, one of the best known of these organizations, in Brooklyn, New York, will not lend more than eighty per cent. Certainly, in dealing with any lender who is in business for a profit, the home buyer is foolish, except in very special cases, to purchase a house unless he can pay at least twenty per cent. cash down.

At the start we may eliminate Numbers five, six and seven from our list. They are rarely wise methods of doing business. As a general thing be suspicious of the instalment, or contract plan, which calls for an initial deposit of, say, four hundred dollars on a four thousand dollar house, and forty dollars a month payment.

Several development companies have used this method fairly and honestly, and some even successfully. But these instances are more in the nature of exceptions. Look with double care upon an offer which is couched in terms like this: "We will build your home for a small initial payment and you pay the rest in monthly instalments - just like rent."

Of course if you have enough money to buy a home outright for cash there is no financial problem to be faced and you don't need to read this chapter. It is by no means wholly an advantage to pay cash for a home and have it free from debt. By leaving a small first mortgage on your house you can use the money to better advantage elsewhere, provided you need it in business and know how to invest it safely. A small first mortgage on a good house owned by a responsible person favorably known in the the community, can usually be placed, at least in the older sections of the country, at five per cent. Moreover, a house is almost always easier to sell if it has a small mortgage upon it. By small, I mean fifty per cent. or less of the actual value.

If you have enough money to pay cash for half your home you will find plenty of small, local insurance companies, savings-banks, trust companies, estates and individuals, together with an army of real-estate agents and lawyers acting as go-betweens, who are ready to lend at five or six per cent. - at least in the eastern and middle states - on half the value of a home. This is especially true in the neighborhood of a town or fair-sized village.