The Interesting History of Mortgages

 

Mortgage rates have hit their record lows and even though they've risen slightly, it’s a great time to buy! First time homebuyer programs offer loans with down payments as low as 3% and millennials are buying homes!

 

Mortgage rates have not always been low, if you’re old enough to remember 1981 and the average rate of 17% for a 30 year fixed note!

 

Did you know that mortgages once were only written for three to five years and not amortized? In the 1920’s this was the reality of home buying and mortgages could be renewed by the bank, or not! By not amortizing the loan, borrowers were paying back mostly interest and ended up being in a constant state if indebtedness. When the stock market crashed and the loans became due, banks refused to renew loans and loans became more expensive and harder to get. An astonishing half million homes were in foreclosure and the housing industry collapsed. In the mid 1930’s the construction industry was 1/10th the size that it had been prior to the crash. Finally, the New Deal focused on restarting the construction industry and ultimately the banking industry. Want to know more? Read Debtor Nation: The History of America in Red Ink by Louis Hyman

 

Mortgages have come a long, long way and we have learned a lot through the years about lending practices. At RE/MAX Flagstaff our dedicated REALTORS® are driven to serve you and are committed to success. Please let us know how we can assist you with your real estate needs. Call us at (386) 246-8585.

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Saturday, 21 September 2019

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