The main factor in borrowing money on mortgage is not, as is commonly believed, the rate of interest, but the permanence of the loan. The man who is building a home half on cash and half on money borrowed by a mortgage is safe only in so far as he is sure that he will not suddenly, and without warning, be forced to pay off the mortgage or a large part of it, on penalty of losing his property. The danger of a mortgage being "called," together with the consequent danger of foreclosure, is a very real one, and home-buyers should take every precaution to guard against it.

This peril of imminent foreclosure is particularly great in communities where it is customary to have short-term mortgages, running for one or two years, without the assurance by the lender of renewal upon maturity. The home-buyer should arrange, if possible, to borrow from a lender who will consent to the mortgage being paid back in instalments- It is the only-safe way. There is hardly a community where some such arrangement can not be made in one form or another. It is not only good business for the borrower, but it is far safer for the lender, i. e., the owner of the mortgage. If you buy a home and arrange to pay back the mortgage in instalments, you must keep your rent money absolutely sacred to those payments. Many people who have paid rent feel as if they had no expenses when they buy a house. They feel rent free, but the money they formerly paid the landlord should now go to the lender on mortgage.

It is especially desirable that second mortgages should be paid off in instalments. They rarely are renewable from year to year as so many first mortgages are. They are much harder to sell and they usually bear a higher rate of interest. It is not safe to buy a house or build a house with two mortgages upon it unless the purchaser is certain to have funds in hand to pay off the second mortgage promptly and rapidly.

There are any number of lenders on home mortgages. In many towns and small cities there are the companies that guarantee titles and deal in home mortgages, there are trust companies, occasionally small banks, and the smaller local fire and casualty insurance companies as well as savings-banks, although in large cities it would hardly be worth while for the home-buyer to approach one of these institutions. If possible, it is better to borrow from an institution than from an individual, although thousands of private individuals lend money for home buying and building purposes. It is also a favorite form of investment for the funds of estates, and these are perhaps more desirable lenders from the home-owner's point of view than individuals are.

Institutions to a considerable degree, and estates also are less likely to demand the sudden payment of a mortgage than is an individual lender.

Perhaps the most common way of raising money to buy a home is to borrow it from the real-estate firm from which the house is bought or from the lawyer who does the legal work. These men have free access to officers of lending institutions, or themselves often represent estates with money to lend on mortgage. It is all right to borrow in this way provided the real-estate agent or lawyer has a good reputation and does not advertise extensively and sensationally his ability to get money cheap for home-buyers. I think in many cases the home-buyer would be wise to try to make the acquaintance of an official in some small savings-bank or insurance company rather than dealing with middlemen.

There are a great many semi-philanthropic organizations which lend to home-buyers. Find out if there is one in your town. It is not charity, but the effort of far-sighted citizens to increase the number of home-owners and thus improve the community. These organizations do not lend money more cheaply than others. They almost always charge six per cent. But they protect the householder in case of illness. They do not call his mortgage, but invariably arrange for easy and fixed instalments.

There is one other excellent method of buying a home, through the building and loan. These are called "savings and loan" in New York, "cooperative banks" in Massachusetts, "homestead organizations" in Louisiana, and "building and loan" in other states. They have reached their highest point of development in the city of Philadelphia.

In 1914, there were six thousand four hundred and twenty-nine local building and loan associations in this country, with total assets of one billion two hundred and forty-eight million four hundred and seventy-nine thousand one hundred and thirty-nine dollars. In 1915, these sums were considerably larger. One does not hear much about the building and loan associations because they are organizations of debtors - men striving by cooperative means to pay off the mortgages on their little homes; and the debtor is never a loud talker or boaster.

The building and loan society is most useful when the would-be house-owner is able to invest immediately only from one-fifth to one-third of the total purchase price, which is usually about the value of the lot, or a little less.

In order to borrow from a building and loan association you become a member, which means taking out a certain amount of stock. This stock is paid for in monthly instalments, which amount is enough to meet also the six per cent. interest on the loan you have made from the association and gradually to pay off the loan itself. The profits on the stock and the length of time in which it takes to pay for the stock all depend on how many loans the society makes and how well they turn out. This uncertainty is the one bad feature about the building and loan.