What does it mean?

Do you know the actually meaning of the word "Mortgage"?

It actually is a derivative based on old French.

"Mort" means death.
"Gage" means Debt.

So it literally means "Death-Debt"!

Why do we do it?

The main reason people have mortgages is because it is the only option presented to them. Think about it- if people were told that there was another way to own a home without paying huge interest, don't you think they would at least listen?

The Mortgage game.

The first thing a realtor will tell people when shopping for a home is to get a pre-approved mortgage. This is done to speed up the buying process and to find out how much home a customer can afford. The problem is that when most people hear how much the bank says they can afford, then they start tolook for homes in that range regardless if that is too much home for them. It is selling the customer a packaged dream. If the realtor agrees with the bank that this is what is good for me then why should I argue? "Just think of how jealous everyone will be of my home..."

Do you realize how much money you are handing over to the banks for the privilege of providing you financing? Even with interest rates at an all time low, a bank will make in interest payments alone almost the exact same ammount they lent you. So, a 25 year, $250,000 mortgage at 6% will net the bank apporximatly $230,000 more in interest payments over the term of the mortgage. So over 25 years that $250,000 house actually cost you $479,000. And that is only if the intest rate stays this low!

Very few people stop to ask if they need to spend all the money the bank will finance. Very, very few will ask if they need a mortgage at all.