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SECTION THE HERALD Wednesday December IB Page Ownershi j isnt the Alter your budget for that new home By MACK PARLIAMENT Rearranging budget priorities la omatlmw Decenary when family cbaogei from tenant to hone owner status The statns switch often acquiring neb major and dryers or Items that renter dont However this Initial period of a slightly differ ent budget pane and barring higher mortgage Interest rate each as experienced in the latter pert of and the first half of 193 a family can settle down to a fairly regular and pre dictable schedule of cash outlays For one thing the price of the borne Is fixed and It a permanent against inflation rent which is forever en tbe upswing the price cannot be changed once new owner takes over Of course should the par- chaser deckle to set at any time In the future he is entitled to the profit result log from the increased value of bis property There have been many discussions comparing the merits of owning to tbe merits of renting The investment aspect and control over price are two reasons why tbe majority of dwelling units In this country an owneroccupi ed attesting to value Canadians place on home ownership Traditionally the aver age price of homes has escalated with almost every passing year Between and IBM the av price of processed thxi MULTIPLE LISTING SERVICE by real estate boards which are memb ers of The Canadian Reed than tripled Average prices Increased from toVMN making buying property si Investment ONLYAMEMOKY There was a time more than years ago before Interest rates reached tbe 10 per cent mark a level that would be considered low today that the term of tbe mart gage loan and he amor fixation period coincided A borrower paid the same Interest and made the same monthly payment for as long as It took to pay off the mortgage whether It was SO is or even 30 years The mortgage never bad to be renewed Economic conditions don t remain static bow- ever and mortgage lend ers of tbe 1980s and won gamble that interest rates will remain static for an indefinite period into the future So Instead of having mortgagee at a fixed rate of Interest for a couple of decades of to morrows five years Is now longest period a lender will accept and not all of will gamble on tions that far ahead The net result is there ore usually at least four different mortgage inter est rates at each lending Institution one for a year another for a two year toon still another for three years and again one for five years Tbe longer the period of the loan tbe higher tbe rate thus pro tecting lender if rates suddenly take off terms of tbe loans mesa they are paid off In that period of time only that they have to be renew ed rates then current when term expires actual repayment period could be over any number of years but ATI of this Is a familiar bat not necessarily a wet- home owners who have to term at which rate they are going to take When mortgage rates Into the stratosphere last year many home owners found themselves having to readjust tbelr budgets lo make higher payments If their mortgages came be for renewal In some cases a wire will rejoin the labor force with singleminded purpose of paying oft the gage so that It cease being an expense at the earliest possible moment Bearing in mind that mortgage payments are made with after tax dollars the last example where savings r equals sfter tax earnings of more a year for years Tbe savings could provide an excellent for a retirement or Invest meet program working for tbe home owner instead of for the To demonstrate bow ridiculously small the difference In monthly pay can be in relation to the period of amortiza tion one only baa to look at contrast between and SO years At a IS per cent Interest rate the monthly payment on a mortgage Is over a repayment period as previously mentioned On repay period of 50 years tbe monthly payment la reduc ed to 11 But the Interest paid over the term Increases from to difference of to reduce monthly payments by less than Is any morn convincing argument needed to pay off a mortgage as quickly as possible ER SHOPPING SERVICE TOO BUSY HOUSEBOUND BA0 WEATHER Let us do your shopping and errands for you PAY ON DELIVERY For more Information call- 8778542 DEADLINE DECEMBER 31st Come to- OXBOW o o K s ID LEASING A CAR OR TRUCK GIVE US A TRY CLUE word for ANSWER R00S SeettuMHew KC Munchkirt tram Metier HOW AT RYDERS TV srsrss PAH FLU We Now Set CROSSWORD CORNER E Cross Pun Atuwron ELLIS TOWN The says SB Asking only but zoned commercial lo your hob- try Into a money maker Cal WOULD MY absolutely Com ttsw jumul spiral BOO OSS win go list Mean lew Wood and gel started EIDER STATESMAN This lovely wo storey homo the hill shows loving cars Wards I Sow and homry cams to your on In suction pries too BOO Ruth show you how to buy this FANTASY Can you heat the splash of Hue water the tinkle of cubes and laughter of Leave the pool an rest on the massrve deck Coma Into the family room ret room dreaming coma see thtt lovely big tamVy home on treed lot in Erin MB Can RuDi lament Are senna their cozy home Its oft treed lot triple gangs snd revenue aw per year A lot lor BOO Belter hurry on oriel Ruth gracious old home sits treed comer Eighty years charm even the from porch Don to room you ike you wis homer See with Irene Wood Economical comfort is yours In ties twobedroom moots lor Larv dicaped lot backs onto parkland Includes deck porch wood stove sod rings Cal Ruth