The term mortgage originally came from Old French, literally ‘dead pledge,’ from mort (from Latin mortuus ‘dead’) + gage ‘pledge.’
In layman’s words, mortgage is simply a conveyance of an interest in property (real or personal) as security or pledge for the repayment of money borrowed.
A quick look back on how it all started. Mortgages came about when the insurance companies wanted to gain ownership of properties and not primarily in the interest of making money. It used to be that only four in 10 households had their own residences since mortgage loan terms were restricted to only 50 percent of the property’s market value. Also, the repayment scheme then was just 3 to 5 years that would eventually end in an enormous payment.
Nowadays, mortgage has become much more flexible and payment friendly to any average Joe or Jane aspiring to own a home but doesn’t know where to begin. With the wide availability of mortgage calculators, you can easily determine how much you can afford and how much you can borrow to acquire a piece of real estate. Another useful tool would be a mortgage payment table that is sometimes referred to as amortization table. It lets you know accurately how much you will be paying over the life of your loan – even showing the principle and interest on a monthly or yearly basis.
One may consider mortgage as a life long burden on your back. For some typical homeowners, their monthly mortgage payment could be the largest expense item on their list. On the contrary, the world of mortgages makes home ownership feasible for so many people. With the proper knowledge and selecting the right type of mortgage, it shouldn’t be such a pain purchasing that dream house after all.
