Discover the Surprising Side of Homeownership: Top 11 Fun Facts About Mortgages You Never Knew

1. Pre-Depression Mortgage Struggles

Before mortgages started behaving like upstanding members of the banking family, they were the delinquent posse your parents would warn you against: limited, rebellious, and oh so demanding: Before the Great Depression, mortgages required borrowers to pay 50% of the home's value upfront and settle the entire loan in just three to five years, leading many families to resign themselves to a rental lifestyle.
Source => americanfinancing.net

2. Rent-a-Swag Real Estate

Ever heard of a Rent-a-Swag for real estate? It's like Tom Haverford's high-end clothing rental service, except for houses: Enter the world of land installment contracts, where buyers can skip traditional banks and lenders to make direct payments to sellers over time – securing a property even with shaky credit – while navigating the risk-filled path of higher interest rates and potential eviction.
Source => wwklaw.com

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=> Fun Facts about Financial-Literacy

3. Green Mortgages in the UK

Ever heard of going "green with envy"? Well, UK homeowners and property investors are making their neighbors green with envy - over their mortgages! That's right, green and energy-efficient homes are no laughing matter: Many UK banks and building societies offer "green mortgages" that come with lower interest rates or cashback incentives for homeowners who make energy-efficient improvements, and some even cater to buy-to-let properties, self-builds, and eco retrofits.
Source => greenfinanceinstitute.co.uk

4. Medieval Serfs vs Mortgage Borrowers

Before the 30-year mortgage swept in like a knight in shining armor, homebuyers were more like medieval serfs, toiling under the oppressive weight of their giant down payments and balloon-payment yokes: In fact, prior to the 1930s, getting a mortgage required up to a 50% down payment and terms were only five years, with borrowers making interest-only payments before a lump sum was due, but the establishment of the Home Owners' Loan Corporation and the Federal Housing Administration changed it all and made homeownership a true American dream.
Source => grarate.com

5. Mortgage Debt as a Hollywood Celebrity

If mortgage debt were a Hollywood celebrity, it'd be the heavyweight champion, effortlessly beating the likes of feisty student loans and high-octane auto loans out of the limelight: Mortgage debt accounts for a whopping 42% of all American debt, towering at $10.44 trillion, while student loan debt lands a distant second at $1.57 trillion, and auto loan debt trails behind at $1.42 trillion. However, much to mortgage debt's chagrin, it doesn't outshine the combined glam of credit card and student loan debt in the United States.
Source => ramseysolutions.com

6. HAMP's Mortgage Assistance Magic

Ladies and gentlemen, grab your calculators and party hats, for we're about to dive into a thrilling tale of mortgage assistance and financial sorcery: HAMP, the prodigious voluntary program, swooped in to save nearly 5 million American homeowners from the jaws of foreclosure, slashing their monthly payments by a whopping median of $530, and doubling the private loan modifications that reduce payments, making mortgage modifications magical for homeowners, servicers, and investors alike, all without costing taxpayers a single dime!
Source => home.treasury.gov

7. Jack Sparrow Navigating Tax Deductions

Navigating the mortgage sea like a modern-day Jack Sparrow? Beware, matey, the tax deductions be more mysterious than Davy Jones' Locker: The amount of home mortgage interest you can deduct on your tax return depends on the date of your mortgage and how you use the proceeds, so keep a sharp eye on that loot or risk losing those precious monetary treasures to the tax kraken!
Source => irs.gov

8. Fannie & Freddie's Secret Identity

In a twist straight out of a daytime soap opera, Fannie Mae and Freddie Mac are not who they claim to be: These quasi-governmental twins, created by Congress, purchase mortgages from lenders and bundle them into mortgage-backed securities for investors, rather than supplying affordable loans directly to borrowers, ultimately lowering interest rates and expanding available housing funds.
Source => fhfa.gov

9. Canadian Mortgage Stress Test

Ready to flex your mortgage muscles, Canada-style? You'd be wise to hit the financial gym, for a stress test is in order, eh!: Since 2018, all Canadian homebuyers seeking low- or high-ratio mortgages must undergo a mortgage stress test, officially part of Guideline B-20. This requires banks to evaluate borrowers' resilience at rates higher than the contracted one by using the Office of the Superintendent of Financial Institutions' (OSFI) minimum qualifying rate (MQR) or your agreed-upon rate plus 2%, whichever dominates the hockey rink. With that knowledge, you can dodge financial penalties – and rotten tomatoes – before committing to a mortgage.
Source => ratehub.ca

10. "Mortgage" Doesn't Mean Death!

Murder, she gaged: Contrary to popular assumptions, entering into a mortgage isn't akin to signing your own death warrant. In reality, the word "mortgage" stems from the Old French words "mort" (meaning dead) and "gage" (meaning pledge) and refers to the figurative "death" of the pledge once the loan is repaid or the borrower defaults, rather than implying an ominous debt-till-death situation.
Source => blend.com

11. Monopoly Board Tax Deductions

Who knew tax deductions were waiting at the end of the Monopoly board? Nestle your humble abode with a little financial merriment by making a mortgage move that'd make Scrooge smile: Paying your mortgage early, before year-end, can increase your potential tax deduction from mortgage interest. Just remember, this thrilling magic trick only works for owner-occupied homes and deductions may depend on your loan specifics and state of residence. As always, it's wise to summon a financial advisor to help you conjure money-saving spells.
Source => smartasset.com