How Much Do You Know About Your Mortgage?
What do you really know about your mortgage?
If you have purchase a house recently then you may have needed a mortgage – most of us do.
You will therefore know that it’s a rather large loan that is going to take years to pay off.
What else do you know about your mortgage?
The Definition Of The Mortgage
As a noun the word “mortgage”means a legal agreement by which a bank, building society, etc. lends money at interest in exchange for taking title of the debtor’s property, with the condition that the conveyance of title becomes void upon the payment of the debt.
The mortgage is the legal agreement, and the money borrowed is in the form of loans;hence the other term we use called home loans.
A mortgage broker is therefore a person that arranges mortgages between borrowers and lenders.
Where Did The Term Mortgage Come From?
The origin of the word “mortgage”comes from Old French and means a ‘dead pledge’.
This comes from mort (from Latin mortuus ‘dead’) and gage ‘pledge’.
The term comes from the Old French “dead pledge,” and apparently meaning that the pledge ends (dies) either when the obligation is fulfilled (the loan paid off) or the property is taken through foreclosure (mortgagee sale) by the lender.
Coke, Edward. Commentaries on the Laws of England. “[I]f he doth not pay, then the Land which is put in pledge upon condition for the payment of the money, is taken from him for ever, and so dead to him upon condition, &c. And if he doth pay the money, then the pledge is dead as to the Tenant”
Source: The Economist
Other Things That You Should Know About Your Mortgage
Many people do not take much time to learn about their mortgage or how to best structure their mortgage.
Maybe if people understood the differences between mortgages then people will spend a little more time to learn about mortgages and how they work.
Did you know that a $500,000 at an interest rate of 5.80% would cost you $677 weekly, but did you also know that over that 30-years you will pay over $1 million – or $1,055,429 to be more precise which is 2.11 times more than the original amount that you borrowed.
Did you also know that if you paid an extra $50 per week you could cut the loan term by 4-years and save about $100,000 ($950,328 versus $1,055,429).
The most important part of a mortgage is the part about paying it off.
As mortgage brokers we show people how to structure their mortgages better so they can pay them off faster, but while still maintaining control and being flexible to change with changes in life.
We also explain things as we believe you should know about your mortgage.