GAMBLE FOR YOUR HOMESTEAD FRONT MONEY

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by CRAIG WILSON:

Everyone loves a success story, and the article "Gamble for Your Homestead Front Money!" by Mrs. W.G. McCusker (MOTHER NO. 27) made good reading. I'm sure we're all delighted that the couple were fortunate enough to obtain a $16,000 home in bad shape, fix it up and sell it two months later for $21,950. Readers who follow the McCuskers' advice exactly, however, may not be so lucky.

First, Mr. and Mrs. McCusker were willing to accept friendly advice from a real estate agent, from a tool rental firm and from almost everyone else . . . but they didn't trust the banker. Yet banks, too, are there to make money, and generally find they can make more if they give good service and win friends.

I suspect that the couple might have saved expenses if they had explained their idea to a banker and found out whether they actually needed to set up a mortgage at all. Some sort of short-term note might well have lowered the closing cost and spared them the other fees normally involved in arranging a long-term agreement.

Also, substantial penalties are sometimes required when a mortgage is closed out extremely early or excess payments are made on it quickly. These charges are designed to cover the costs which the bank incurred in setting up the unnecessary mortgage.

Another point: My own feeling is that the McCuskers wasted a lot of travel time by living elsewhere. It would have been simpler to stay in their new house—in sleeping bags in the spare room or something—to avoid the additional cost of renting an apartment. Not only that but fire insurance and some form of homeowners' liability insurance (necessary to satisfy the banker) are often considerably more costly for an unoccupied dwelling.

Remember, too, that an empty house—no matter how secure it is—quickly becomes a target for vandals. Youngsters in a neighborhood know when a building is unused . . . and one or two small children, armed with a brick and a box of crayons, could have done substantial damage to the McCuskers' face lift.

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