Get Back to School with First Foundation’s Mortgage U!

Welcome to Mortgage U!

Obtaining a mortgage can be an intimidating process for anyone, even if you’re a second or third-time buyer. The process itself often seems veiled in mystery and we don’t typically use mortgage terminology in our normal, day to day lives so much of it is Greek to even the most sophisticated of us.

As they say, knowledge is power and since we’re all about empowering our friends over here, grab your varsity sweater and check in every Thursday to First Foundation’s Mortgage U ( as in University) to update the gaps in your home financing knowledge. We’ll start at the beginning and work our way to the more complicated aspects of home financing with the goal of demystifying the process so you’ll feel in complete control the next time you venture into purchasing a home.

Today’s lecture will be on the meaning of the term “mortgage” itself.

According to First Foundation’s very own Canadian Glossary of Mortgage Terms, the meaning of the word “mortgage” is as follows:

A mortgage is a lien against real estate in exchange for the repayment of money. A mortgage may be for a loan used to purchase the real estate, or for money loaned after the real estate is purchased. In either case, the real estate is used as security for the money lent, or mortgage loan, and the mortgage is the security agreement. Mortgages are public documents and are recorded.

And I love this explanation of the origin of the word as found on The Free Dictionary by Farlex:

The great jurist Sir Edward Coke, who lived from 1552 to 1634, has explained why the term mortgage comes from the Old French words mort, “dead,” and gage, “pledge.” It seemed to him that it had to do with the doubtfulness of whether or not the mortgagor will pay the debt. If the mortgagor does not, then the land pledged to the mortgagee as security for the debt “is taken from him for ever, and so dead to him upon condition, &c. And if he doth pay the money, then the pledge is dead as to the [mortgagee].” This etymology, as understood by 17th-century attorneys, of the Old French term mortgage, which we adopted, may well be correct. The term has been in English much longer than the 17th century, being first recorded in Middle English with the form mortgage and the figurative sense “pledge” in a work written before 1393.

To be clear, then – a mortgage is an arrangement agreed upon between a borrower and a lender that states that the lender will lend a sum of money to the borrower to purchase a property but if the loan is not paid as agreed, the lender will take the property from the borrower as part or total payment of the loan.

So in fact, the word “mortgage” does not actually refer to the loan itself, as commonly thought, it actually refers to the agreement made ABOUT the loan.

There! Who knew the world of mortgages could be so exciting – we’ve addressed the 17th century, Middle English and the little known, hidden meaning of this odd little french word with a silent T that means “Death Pledge”. You’re certainly going to sound very cerebral at the dinner table tonite!

Class dismissed – see you next Thursday!