Generally, everyone knows that getting a mortgage can be a stressful and busy process. There’s lots of work involved, and sometimes it’s not easy work. So we’re going to try to add some fun, but still informative, mortgage knowledge to your repertoire. Hopefully, you’ll not only learn something new, but you’ll give yourself a break from the normal daily grind. So let’s take a look at a few weird mortgage facts!
Til death do us part
Have you ever wondered where the term “mortgage” comes from? Furthermore, have you wondered what it means? As surprising as it may be, the word mortgage comes from the old French language. “Mort” meaning dead, “gage” meaning pledge. Which means that mortgage literally means “dead-pledge.”
This is because most assumed that the paying off of their debt would last until their death. However, we would certainly hope you get your mortgage paid off before your death.
Generally, in the United States, most people’s doors serve as a way to keep some things in, and certain other things out. Assumably, weather out, people in, and the list goes on and on. Doors also serve as a style statement sometimes. But in Scotland, when you see a red door, you should think mortgage.
Often in Scotland, when a homeowner is mortgage free, they paint their house’s door red. Subsequently, the striking color is sure to catch a passerby’s eye’s and announce that the owner is debt-free. Also, the United States also has it’s own quirky mortgage traditions, even though they’re not necessarily well known. As an example, when a homeowner is debt-free, they sometimes place a winged eagle plaque over their front door as a symbol of their mortgage being paid off. Therefore, you might want to think about grabbing a can of red paint, or an eagle for when that day arrives.
Many people are clueless about mortgages
To begin with, have you ever felt clueless when it comes to mortgages? Well, rest easy, because you’re not the only one. From an April 2013 survey done by Zillow. “Among the survey’s findings, 31% of buyers don’t think it’s possible to get a mortgage for less than 5% down; 34% don’t know what the term “annual percentage rate” (APR) means and one in four believe you must close with the lender that pre-approves your mortgage.”
However, it’s not difficult to become knowledgeable about these subjects. Doing your own research, and getting help from a mortgage company will be beneficial in the long run.
Enough mortgage debt to go around
Generally, when we think about mortgage debt, we’re only thinking about our own. And not everyone else’s. Therefore, not many people know just how much mortgage debt there is in the United States. According to the Federal Reserve Bank of Saint Louis, there are over 10 billion dollars of home-related mortgage debt, in the United States alone.
Furthermore, this means, that if every citizen of the United States paid just 30 dollars, we could pay off basically all home mortgage debts. Talk about a weird mortgage fact!
Love and mortgage
As we mentioned earlier, the word mortgage comes from the old French language and means “death pledge”. But when and where was this word first used? Actually, the first recorded use of the word was rather romantic and had nothing to do with houses. John Gower, an English poet, was the first person to use the word, sometime before 1398. It appears in his 33,000 line poem Confessio Amantis, and is spelled without a “t.”
The poem reads, “In mariage His trouthe plight lith in morgage, Which if he breke, it is falshode.” In more modern day English, we would read: “In marriage, his troth-plight (engagement) lies in mortgage, which is a falsehood to break.”
Spend a little, save a little
Generally, most loans are amortized over 30 years. However, you can save a lot of time and money by paying a little extra each month. As an example Mortgage Money Mover tells us that for the average $300,000 loan, paying an extra $100 a month will help you pay off your mortgage 5 years early. As a result, you’d be saving about $60,000 in interest!
They go on to say that if you double the extra $100 a month, you can pay it off in approximately 21 years, saving over $100k. Furthermore, paying an extra $500 a month will save you almost $200k in interest. We’d call that a win-win. So, if you have the extra money to put out each month, it’s definitely worth it.
As our last weird mortgage fact, we’ll briefly cover an entertaining aspect about mortgage payments. If you know anything about mortgages, you’ve probably heard the term “balloon payment” before. Maybe you’ve wondered what it means. Well, even though the name might lead one to hope it’s not expensive, it does not mean you can pay with balloons. It’s actually rather opposite.
A balloon payment is your last mortgage payment and gets its name because of its size. However, if you happened to send a balloon along with your last mortgage payment, it probably wouldn’t be a problem.
Weird mortgage facts to tell your friends about
Now that you know some weird mortgage facts, it’s time to put them to good use, and impress your friends! Test their mortgage know-how, and see just how much they know. Then check out our article on the history of mortgages, so you can keep learning. You can never know too much when it comes to mortgages!