What is a Mortgage and Why Do I Need One?
“Mortgage” is an obligation to pay back a specific kind of loan for a house. The term comes from the Latin “mort” which means death. The notion of a mortgage meant that you would pay it until it died (after say 30 years), or until you did. We personally think a more clever name for it would have been “debth,” but we weren’t around at the time to toss in our two cents.
Most people don’t have silver spoons in their mouths, Daddies who will underwrite their homes or a lottery ticket in their pocket. They have a clear choice: either pay rent for many years (and a lot of taxes) or take a little risk, borrow money from a bank, and become a homeowner.
Mortgages are a necessary evil in a world of limited resources. They exist to help people accomplish goals and achieve a lifestyle better than what they currently have. At the end of the day, mortgage is just a fancy term for a loan. If you want to make it even fancier, try putting an accent over the “e.”
A mortgage helps you a buy a home that costs more than the cash you have in your bank account. In addition, the government gives you a little help by subsidizing your payments with tax deductions.