Mortgages are indeed a part of our day-to-day lives. Mortgage systems have been found to have started as early as 1190. However, regardless of how many years old this system is, know that the basics have never changed.
Mortgage And Its Origin
The history of the actual word “mortgage” is indeed very interesting. “Mort” came from the Latin work for death while “gage” is from the sense of such word which means a pledge to forfeit something of value when the debt is not repaid. Thus, mortgage literally means, “a dead pledge”. It was deal for 2 reasons – the property was forfeited to the borrower when the loan was not repaid, and the pledge itself was dead when the loan was repaid.
England was the first who implemented such system in 1190. English common law included a certain law which would protect a creditor by giving him an interest in his debtor’s property. Based on this law, the mortgage was a conditional sale.
As pioneers moved from Europe to settle in America, they have brought their systems with them. And as land ownership increased, the need for mortgages likewise increased. Thus, by early 1900s, mortgages are already widespread and readily accessible.
Trivia Info Resource: zepfinance.com.au
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