etymology of the word "mortgage"

[forestdale]

I have wondered in the past about this word. I knew "mort" meant death so until today I just wondered and never researched it. Here are my findings:

...it means dead pledge...

[Middle English morgage, from Old French : mort, dead (from Vulgar Latin *mortus, from Latin mortuus, past participle of morī, to die) + gage, pledge (of Germanic origin).]

WORD HISTORY The great jurist Sir Edward Coke, who lived from 1552 to 1634, has explained why the term mortgage comes from the Old French words mort, “dead,” and gage, “pledge.” It seemed to him that it had to do with the doubtfulness of whether or not the mortgagor will pay the debt. If the mortgagor does not, then the land pledged to the mortgagee as security for the debt “is taken from him for ever, and so dead to him upon condition, &c. And if he doth pay the money, then the pledge is dead as to the [mortgagee].” This etymology, as understood by 17th-century attorneys, of the Old French term morgage, which we adopted, may well be correct. The term has been in English much longer than the 17th century, being first recorded in Middle English with the form morgage and the figurative sense “pledge” in a work written before 1393

[Valerie in WA]

That's interesting, Rhonda.

I just read an article in today's paper about mortgages. Our rates are starting to creep up from the rock-bottom they've been. I am shocked by how many people are using ARM's (Adjustable Rate Mortgages) and Interest-only Loans.

As I was reading how ARM's work, I found myself wondering why on earth anyone would get one. You're pretty much guaranteed to have your payment markedly increase after a certain point (usually one to five years). Well, then the paper explained that ARM's allow people to qualify for larger mortgages than they would otherwise.

Interest-only loans have that same feature, because the borrower only pays the interest on the loan, never the principle. The payment is lower, which increases their (virtual-IMO) buying 'power.'

I'm so thankful that we got a standard mortgage and even more thankful that we re-fied to a 20yr, and ever MORE thankful that would should have the whole thing paid off in about 15 yrs (total). Still the interest we've paid is appalling.

[forestdale]

Valerie, the interest only loans here are usually taken on by people who invest in property. They pay the lower payment while they renovate the property and then pay it all off when they sell, generally a year or two after they take on the mortgage. It might be the same over there.

When we bought our home we had a standard mortgage that we paid fortnightly, plus every extra penny we had we put aside for additional payments. We completely paid it off in 8 years. Boy was that a great feeliing.

[Valerie in WA]

Originally posted by forestdale
Valerie, the interest only loans here are usually taken on by people who invest in property. They pay the lower payment while they renovate the property and then pay it all off when they sell, generally a year or two after they take on the mortgage. It might be the same over there.

I just rechecked the article and nope! These are used for primary residences. It says that some people get an interest-only loan when they plan to move within 5 years 'because the principle paid in the first few years is insignificant.' The article went on to say that some less 'credit-worthy' buyers were using IO loans to afford more of a house than they could otherwise afford.

No offense to any individual, but I think this trend is another step on our society's journey toward ever more consumerism and instant gratification. Big goals take patience and we are not raising a generation of people willing to wait.

[forestdale]

I couldn't agree with you more about the instant gratification. I see any debt incurred is a big responsibility. Living within your means is a valuable lesson to learn.