Mortgage Facts ( What You Want To Know Wednesdays)

Knowing is half the battle! Before you make an life decisions, you do research. Research helps prepare you for what’s to come, and helps you compare and figure out what is best for you. Enjoy these 20 interesting mortgage facts to help you achieve your dream of homeownership!

Buying a home for the first time is a crucial investment, yet when renters who plan to buy within the next five years were polled, 45% didn’t even know what their credit score needed to be to qualify.

 

In fact, the average consumer thought that their score needed to be 652 to buy a home, much higher than the minimum of 620 required for Fannie Mae loans or FHA’s even lower requirements.

 

Mortgage rates change constantly. However, rates are much more stable than they used to be. In fact, in 1987, rates jumped from 9.1% to about 11.4%, and in 1994, they spiked from 7.2% to about 9.4%! Currently, mortgage rates are still near record lows.

A 20% down payment used to be the magic number, but now you do not need that much of a down payment. The average homebuyer put only 6% down when purchasing a home.

 In 2009, there were more foreclosures than there were marriages.

 The oldest house in America is the Henry Whitfield House in Guilford, Connecticut, a stone American Colonial house built in 1639. It’s been a museum since as far back as 1899.

 Paying off your mortgage is a seminal event for anyone, but people often celebrate their freedom from a home loan in interesting ways. For instance, I Scotland, homeowners paint their front door bright red when they’re mortgage-free. The U.S. has our own quirky traditions, with a winged eagle plaque over the front door traditionally symbolizing that the home’s mortgage has been paid off. People have even been known to burn their last mortgage bill (after paying it), an act of defiance made popular when the TV character Archie Bunker did the same in the show “All in the Family!”

 It’s no surprise that the size of our homes has increased markedly over the decades. In fact, in the 1950s, the average home was just over 1,100 square feet, while 1,700 square foot houses were the norm in 1980. However, with the housing boom of the early 2000s, home square footage exploded up to well over 2,200 square feet for the average new home, earning the moniker “McMansions.”

 You can clip a lot of time off the end of your loan by paying a little extra each month. For example if you have a $300,000 mortgage loan, paying just $100 extra each month will help you pay it off 5 years earlier, saving roughly $60,000 or more in interest. Doubling that to $200 extra will allow you to pay it off in about 21 years and 6 months and save more than $100k, and by paying $500 extra every month, you’ll essentially lop that 30 years in half and save almost $200,000 in interest!

 The term ‘mortgage' actually means ‘dead pledge.’ Derived from the Old French term mortgage, a home mortgage is called as such because of the way property is purchased. According to early Anglo-Norman law, the “pledgor” (i.e., the borrower) who buys a home using a loan must pay back the debt in order to become the rightful owner of the property. Given how much money was at stake, purchasing a home was associated with “mort” (i.e., death)—making buying property one of the deadliest of transactions. To “amortize” a loan means to “kill the debt.”)

 

*lenglemortgageprofessionals.com \ realtor.com \ foxbusiness.com


* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.