Did you know that the 30 year mortgage came out of the Great Depression?
Prior to the 1930s, homeowners had interest only, adjustable rate loans with a term of 3-5 years. After the 3-5 years was up, there was a balloon payment (loan was due!). Consumers would just borrow the money again for another 3-5 years. With the bank runs, etc. during the Great Depression it was hard to get the new loan and the government stepped in. Read more here: Why do we have a 30-year mortgage, anyway?
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