A Short History Of The Mortgage
Below is a MRR and PLR article in category Finance -> subcategory Mortgage.
A Brief History of Mortgages
Most people are familiar with mortgages due to their prevalence in homeownership. However, the origins of mortgages are less commonly known. Here's a concise history of how they came to be:
Initially, a mortgage was simply a land conveyance for a fee. The buyer paid a fixed amount, without interest, and the seller transferred land ownership. Although there were conditions for the land to become the buyer's property, it was based on the assumption that the land would generate income to repay the seller. A mortgage was formalized regardless of the land's productivity.
This early system was skewed in favor of sellers or lenders, who held full control over the land. They could sell it, refuse payments, or reject payoffs, causing significant issues for buyers. Over time, due to system abuses, courts began protecting buyer rights, allowing them to demand a clear deed upon repayment. However, sellers retained enough rights to ensure financial security.
In the U.S., different states have developed unique mortgage systems, leading to the concept of lien states. In England and Wales, the Law of Property Act of 1925 closely aligned with U.S. mortgage principles. By 1934, mortgages became more common in the U.S., aided by the Federal Housing Administration, which reduced down payments, facilitating home purchases. At that time, around 40% of Americans owned homes; today, that number has risen to nearly 70% due to lower interest rates.
Modern mortgages have evolved with diverse options, yet they remain fundamentally similar to their original contracts. Numerous laws and regulations now protect buyers, sellers, and creditors. To secure low interest rates, it's advisable to consult a mortgage broker about current rates and available programs to maintain favorable rates throughout your loan.
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