Coffee Break

Why Mortgages Became So Huge

The history of mortgages is rather undefined. Getting a mortgage is often reported on as a struggle, but maybe knowing more about where they came from can help you understand where you can go right and wrong. Here’s a little food for thought on the idea of having a mortgage.


Lack of Housing Options meant People were Desperate for the Long Term

With plenty of slums springing up around huge urban cities in the Victorian era, needing to have a roof over your head was more important than ever. The industrial revolution was making people a lot more sick and towns a lot more polluted, so having a safe retreat where you could rest up was the dream for the common man.

Slumlords were rife and renting a house was the most common practice, but this often meant keeping up with payments you couldn’t manage and rough treatment when that time came.

If you were lucky, or born into the upper class, it’s more likely you owned your house. These kinds of houses still run in these families and can make them millions in the years to come in terms of renting. All because mortgaging options were more primitive.

Nowadays there’s a Lucrative Market for Real Estate Options

A lot of has changed since the early days of owning your own land, and being ‘enfeoffed’ of it. Seeing as we live in a modern world, mortgages are also a more modern invention. There’s a lot of factors that affect whether a person can get one and whether it’s worth it to get one.

Needing money to own your own home outright seems a little counterproductive, but it’s often the only option people have. Sure, renting exists and is a good way to keep the amount of debt off your back, but it can often feel like throwing money away. The fact that property financing solution companies such as Enness Group even exist in the first place shows mortgages are a pretty big deal, but they didn’t start off that way.

Own a Home and You Can Make Money off of it

A bona fide mortgage idea was only thought of in the early 20th century, despite it acting without the name for centuries beforehand. Therefore, it’s an established practice that If you have a mortgage and it’s successfully paid off, you own your home outright and can do what you like with it.

With only those of us who could afford to pay off a $50,000 loan by the end of a 5 year contract being able to buy a house, it was an incredibly lucrative market. Yet after the Great Depression, this model changed, and people were met with the options we have today. There was less certainty in knowing if you’d get your money back when loaning out to someone, so a longer period was needed, from 15 to 30 years.

Mortgages have plenty of history about them, and this was our quick run through of then.