2 ms·

The book isn't loading that page, but if it's referring to old English mortgages I believe those were loans from the property owner themself. And the buyer woul

• caymanjim 8y ago
  How is that any different than today? When you have a mortgage, you don't own the property; the lender does (only they've also externalized all the risk to the government via Freddie). If you fail, you might not lose everything, but you lose all the non-principal, which is effectively everything for the first half of the mortgage term. And if you fail while the market is down, you can lose even more than you've paid in.
  • graeme 8y ago
    What do you mean lose the non principal? If you buy a $200,000 house with a $40,000 downpayment, you get it back if you default and the house value is unchanged, right? From what I read back then, you would get nothing unless you had paid everything. So pay in $199,999, miss final dollar, lose house, no money returned.
    • lazyasciiart 8y ago
      Non-principal = all the interest you've paid.
      • caymanjim 8y ago
        Yeah, by non-principal, I was primarily referring to interest. On a 30 year mortgage, you're paying almost nothing but interest for the first 15 years. And the realtor/title fees and taxes are losses as well. The above commenter is right to point out that the downpayment goes toward principal, though. In the scenario I posited where the housing market declines, you can still end up in the red though.
• lazyasciiart 8y ago
  No, it isn't. It starts with China, thousands of years ago.