• What Do Mortgages Have To Do with Death?

 By Ralph R. Roberts

The origin of the word "mortgage" is intriguing. It is a French word generally believed to be derived from two Latin words-"mort" (meaning death) and "gage" (meaning pledge or something of value that's forfeited if the debt is not repaid). In other words, we may be able to blame the current mortgage meltdown on the French!

Although you might feel as though you are signing your life away when you take out a mortgage, that's not really what the word means. The part of the word dealing with death applies to the passing away of the agreement. When the homeowner eventually pays off the loan, the lender's claim to the property is dead. If the homeowner fails to make payments in accordance with the mortgage, the homeowner's rights to the property cease to exist (or die).

A mortgage is a contract that enables people to purchase property without paying the full value upfront. In essence, a mortgage pledges the property to the lender (the mortgagee) in the event that the borrower (the mortgagor) fails to repay the debt according to the conditions stipulated in the mortgage.

Although a mortgage is the most common way to finance the purchase of a property, it is not the only way. The seller can also finance the purchase of the property by way of a Land Contract or Contract for Deed. Instead of allowing the lender to place a lien against the property, a Land Contract or Contract for Deed typically contains a forfeiture clause. The clause states that if the loan is not repaid in full, the property reverts to the possession of the seller (the person who financed the purchase).

To answer the question posed at the beginning of this article, mortgages actually have little to do with death, unless, of course, you take out a mortgage to buy a funeral parlor. Mortgages have more to do with life-being able to purchase a home you cannot afford to pay cash for, so you can enjoy your life and raise a family sometime before you hit your golden years.

Ralph R. Roberts  GRI CRS
The Ambassador of Enthusiasm
"Official Spokesperson of Guthy-Renker Home"
Author of  Walk Like a Giant, Sell Like a Madman
Author of  52 Weeks of Sales Success
Author of Flipping Houses FOR DUMMIES
Author of Foreclosure Investing FOR DUMMIES
Author of Advanced Selling FOR DUMMIES
Author of  Protect Yourself from Real Estate and Mortgage Fraud

67775 Van Dyke
Washington Mi 48095
Office: 586-751-0000
Fax:   586-752-8959
Personal Assistant -Lois Maljak: 810-533-3448
Virtual Assistant- Kandra Hamric -734-446-0328

RalphRoberts@RalphRoberts.com

http://www.realtytracker.com/ Guthy Renker Home
http://www.aboutralph.com/Speaking/Coaching
http://www.ralphroberts.com/ Real Estate Site
http://www.kolleenroberts.com/ Tribute
http://www.flippingfrenzy.com/ Mortgage Fraud
http://www.bignail.com/  Branding
http://www.macombcountyvoice.com/ Community
http://www.getflipping.com/ Flipping Houses Site
http://www.activerain.com/ Real Estate Network
http://www.myspace.com/ MySpace
http://www.vrea.com/ Virtual Assistants