1. The lowest mortgage rates in US history occurred in November 2012, when the average 30-year fixed mortgage interest rate was only 3.31%. At that same time, rates for 15-year fixed loans fell below the 3% mark.
2. What about the highest mortgage rates in US history? In the history of our modern rate structure (tracked since the early 1970s), the highest rates hit in October 1981, when interest rates on 30-year fixed loans reached a sky-high 18.45%!
3. That means the same home loan (let’s say 0,000) in 2012 would only cost you 7 per month at a 3.31%, but a shocking ,088 every month at 18.45%! It’s no wonder why the mortgage rates at that time have been described as financing your home loan on a bad credit card.
4. Where does the word “mortgage” actually come from? It means “dead pledge” in Old French since according to Medieval Anglo-Norman law, the “Pledgor” (or borrower) who takes out a loan to buy a home must pay back the debt in total before they become the rightful owner of the property. So this long-term commitment was considered a lifelong investment, and “mort” (death) – “gage” (pledge) was truly a life or death transaction.
“[I]f he doth not pay, then the Land which is put in pledge upon condition for the payment of the money, 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 Tenant.”
-Edward Coke’s Commentaries on the Laws of England.
5. With our newfound knowledge of Old French, we can also decipher that our current home loan term “amortize” literally translates to “kill the debt.”
6. When FannieMae conducted a survey to see where consumers found their mortgage information and advice, 50% responded that Realtors were one of their top sources!
7. In fact, only 33% of consumers reported that their mortgage broker or lender was their top source of advice about home loans!
8. When filling out a loan application, consumers sometimes become indignant if they don’t qualify for a much larger loan, even with an abundance of assets. In fact, underwriters care very little about assets, and even if you have a million dollars in the bank, they’ll approve or deny a loan based on your income, and your debt obligations versus that monthly income.
9. Can you believe that a man once spent his entire monthly mortgage payment on just four pairs of sneakers? According to the man’s wife, who took to Reddit to lament her free-spending hubby, he blew $2,500, or their entire monthly mortgage payment, on four pairs of Yeezys, which he paid $625 a pair for. According to the disgruntled and mortgage payment-less wife, when he confronted her why he had to buy more than one pair, he responded, “I had to buy two because I needed one to stock and one to rock!” No word on what happened when he told her that he’d purchased four pairs, not just two!
10. Facebook founder and multi-billionaire Mark Zuckerberg has a mortgage on his Palo Alto home. While it may seem head scratching why he wouldn’t just pay for the home in cash, consider that he refinanced his home loan in 2012 to a 30-year fixed at only 1.05%! Reportedly, the refi saved him “only” $1,981 a month because his previous rate was 1.75%.
11. A bank robber named Charles Arthur “Pretty Boy” Floyd not only cleared cash from the safes and drawers of banks in the 1930s but actually burned and destroyed mortgage documents every time he robbed one. By doing so, he made sure to wipe out the record that homeowners owed any mortgage at all, leaving them debt free and earning public adulation as a real life Robin Hood – until he died in a shootout with police.
12. In the United States, there are five times more vacant houses than there are homeless people.
13. Homeowners would be wise to focus on improving their credit score months ahead of applying for a purchase loan or refinance. In fact, the difference between having a great 760 FICO or just a below average 639 FICO can mean saving approximately $200 every month on the mortgage payment, which adds up to saving about $70,000 on a $200,000 loan over 30 years!
14. While the mortgage market is huge business, did you know that almost 30% of American homeowners – or 21 million homes – actually own their home free and clear, without a home loan?
15. How important is home ownership for building financial stability and long-term wealth? Studies show that the average homeowner’s net worth is more than 30 times greater than that of a renter.
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Did you enjoy those? Don’t worry, we’ll have 15 more fun mortgage and real estate facts for you very soon!