who wrote the first home mortgage contract?

plus-gnositicism asked:


I would like to know who first estblished the current standards of a home mortgage. In other words, where did the process of charging mortgage interest by the current method where you pay two to three times the amount to purchase a home. If you buy a $100,000 home under the current methods you repay $200,000 to $300,000 over the period of the loan. Does anyone know because nothing comes up on an internet search except how to get a home loan today. Help!!!
I ABSOLUTELY DO NOT WANT A HOME LOAN NOR DO I HAVE NEED OF ONE.

Dan

Tags: Current, Mortgage Contract, Mortgage Interest

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One Response to “who wrote the first home mortgage contract?”

1. Jeanne R Says:
   June 1st, 2009 at 6:02 am

   James

   Loans of every kind have always included a payment of interest. That is because the borrower is using someone else’s money to buy something and the someone else wants to be paid something for allowing you to use their money. The mortgage goes back at least 1000 years in England. . If you look at a history of home mortgages in the 20th century you will find that most mortgages were for only five years duration and required a 50% down payment and the borrower paid interest only for the 5 years. After that, they either paid off the mortgage or refinanced for another 5 years. This was true during the beginning of the 20th century and up into the 1920s and the early 1930s. It was only after 1934 and the massive foreclosures of the Great Depression that the fully amortized, fixed rate, 30 year mortgage came into being to protect both borrowers and lenders.
   It is still the same today. A longer loan term costs more in interest because you are borrowing money for a longer time. A shorter term loan costs less.