Home ownership has always been part of the American dream. Whether it’s your generation, your grandparents’ generation, or your great-grandparents’ generation, most people balance the thought of owning a home with achieving the right kind of success. After all, owning real estate can help you build wealth, give you access to equity, and offer something tangible that is passed down through the generations.
Best, an online lending and homeownership platform with a free mortgage calculator, has compiled a list of 15 events and milestones in the history of the American mortgage system, using information from news articles, encyclopedias, and historical literature.
While the idea of home ownership isn’t new, mortgages – the tool many people use to reach this major milestone – is a relatively recent concept. In fact, the option to borrow money to buy a home has only been around for hundreds of years. And mortgages, as we know them, have been around for less than that.
The first real mortgages in America were not issued until the late eighteenth century, after the formation of the first commercial bank. By the late 19th century, bank and mortgage loans were common but still unlike the mortgage loans we see today. At the time, balloon payments were common and mortgage loan terms offered by lenders were much shorter than you’d expect – making it difficult for buyers to use them or even qualify.
The events of the past 100 years have had a greater impact on the formation of mortgage loans. The introduction of new laws, along with massive economic shifts – and other events, such as questionable lending practices – have all played a role in improving the mortgage lending process. But what exactly are the events that played a role in the history of American mortgage loans? And how did they help shape mortgage loans into what we know today?
Keep reading to learn about the major historical milestones of the American mortgage system.