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01. This Book
02. Syndicate Boom
03. Get Information
04. Syndicator
05. How much?
06. Depreciation
07. Depreciation Applied
08. Declining Balance
09. Straight Line
10. Paying Taxes
11. Pay Mortgage
12. Income Taxes
13. Paper Loss
14. Tax Shelter
15. Rent?
16. Syndicator Units
17. Wear + Tear
18. Lease-Hold
19. Building
20. Comparison
21. Specialized Properties
22. Growth
23. Leverage
24. Share Growth
25. Why + How
26. Syndicate Agreement
27. Net Lease
28. Long-term Lease
29. No Guarantee
30. Inflation Clauses
31. "Inflation Clause" Works
32. Inflation Clause?
33. Mortgage Due
34. Interest Rates
35. Short Term Mortgage
36. Good Mortgages
37. Refinancing
38. Refinancing Clauses
39. Share of Mortgage
40. Share of Profit
41. Purchase Options
42. How Purchase Options
43. Stunt the Growth
44. "Subordination"
45. Long Term Lease
46. Business Organizations
47. Syndicate Debts?
48. Management
49. Your Consent?
50. Sell Your Unit
51. Investment Trust?
52. Business Syndicate
53. Multiple Properties
54. Dream or Reality?
55. Syndicator's Background
56. Value of Guarantees
57. Look for Yourself
58. Conclusion
Resources
33. Mortgage Due Dates
A mortgage is a debt. Its distinguishing feature from an ordinary debt is that a building is pledged to secure the mortgage debt. Most mortgages provide for regular payments to be made monthly or quarterly. Part of such payments cover interest on the indebtedness. The remainder of the regular payments ordinarily are payments on the indebtedness itself.
Some mortgages are "self-liquidating." Payments are so arranged that after a number of years of regular payments, the mortgage debt is completely liquidated. Such self-liquidating mortgages are ideal. You do not have to worry about renewal or refinancing at higher interest rates. Unfortnately, they are the exception today. Most mortgage lenders on investment properties do not want to have their funds tied up for the number of years it takes to have the mortgage liquidated.
As a rule a mortgage loan is made for a definite number of years, as agreed upon at the time the loan is made. The balance which remains due at the end of that period agreed upon must then be paid back.
If the owner of the building fails to make an installment payment when due or fails to pay back the balance left on the due date, the lender may foreclose and have the property sold. Usually a forced sale of a building brings a low price, sometimes just enough to pay the mortgage debt and expenses. The owners may lose everything they invested.
We assume that the syndicator made sure that the projected income o£ the building will suffice to meet the regular monthly or quarterly payments due on the mortgage. Just the same, you must examine the terms of the mortgage or mortgages. They appear in the brochure.
You will want to know when the mortgages are due, whether the remaining balance will have to be paid in full in one payment. Mortgages which are due in a few years are usually less desirable than long term financing. A short term mortgage may make it necessary to find a new mortgage at a time when it is difficult to borrow money and when interest rates are high. If the mortgage is due in 20 or 25 years, the syndicator will have ample time to choose a good moment to obtain a new mortgage on favorable terms.
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