The word “Mortgage” originated from the Latin language and got accepted in old French in around 1283. The mortgage is made from 2 Latin words. Mort-Gage.
If the borrower pays off the loan by the end of the term, the Pledge was dead. If the loan is not paid off, then the property was Dead to the borrower or was taken away by the lender.
Luckily it is not the 12th century otherwise people would have known me as a person who delivers “Dead Pledges”.
The concept of Mortgage was introduced in 1900 by early European settlers who wanted to own their own homes. They had to come up with at least 50% down otherwise were not approved for a mortgage.
Canadian mortgages have come a long way ever since. In 2011 homeowners were able to own their home with as low as 5% down at less than 3% interest rate. Its almost free money, don’t you agree?
Since the credit crunch, the Canadian mortgage arena has changed but there is one thing that may never change.
The cycle of Lending and Borrowing money to make a profit!
Banks make money when they lend money and homeowners build equities and wealth by borrowing banks money.
Depending on banks risk tolerance, they have implemented something called the “Ideal Client Match” (ICM) strategy. Every bank has there own risk lowering strategies. If you fit into banks ideal, Bingo you got the mortgage.
The old days approach of sending mortgage files to multiple lenders does not work anymore, instead, it makes the borrowers profile even uglier. Banks have streamlined the mortgage approval processes. They have become far more efficient.
If you are looking for a mortgage for yourself, the most important step is to talk to a mortgage expert who understands the importance of matching borrowers to the right lenders.