Homeownership has long been part of the American Dream. Whether it’s your generation, your grandparents ‘generation, or your great-great-grandparents’ generation, most people equate the idea of owning a home with achieving the right kind of success. After all, owning a property can help you build wealth, give you access to equity, and offer something tangible to pass on from generation to generation.
Better, an online lender and homeownership platform with a free mortgage calculator, 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 homeownership is not new, mortgages, the tool many people use to reach this important milestone, are a relatively recent concept. In fact, the option to borrow money to buy a home has only been around for a couple of hundred years. And mortgages, as we know them, have been around for less time than that.
The first real home loans in the United States were not issued until the late 18th century, after the formation of the first commercial bank. In the late 1800s, banks and home loans were common, but they were still different from the home loans we see today. At the time, balloon payments were common and the terms of home loans offered by lenders were much shorter than might be expected, making it difficult for buyers to use or even qualify.
The events that have occurred over the past 100 years have had an even greater impact on the setup of home loans. The introduction of new laws, along with massive economic changes, and other events, such as questionable credit practices, have helped refine the home loan process. But what exactly are the events that have influenced the history of American home loans? And how have they helped shape home loans to become what we know today?
Read on for the major historical milestones of the American mortgage system.