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Here the story goes on :

Years before the year 1925, the United States has Mortgage laws. That was the law of mortage for house possession. All Americans who have met certain requirements, can obtain a mortgage. For example like this: If the salary/ income of a person has reached US$ 10,000 per year, then he can apply a mortgage to buy a house at a price of US$ 25,000. Monthly installments reachable enough for the mortgage term 30 years at 6% per year.

The developed countries , included Singapore, Generally, already have laws Mortgage. Lately, Dubai also has been the law of it’s own mortgage. Since the mortgage law has declared, sales of property in Dubai risen 55%. The law requires mortgage is a very strict criteria for a person to be able to obtain mortgages.

By the “new way”, in 1980, it’s opened opportunities to raise rates. Businesses related to mortgage grow again. The Banks got opportunity to catch extra interest. Banks became more aggressive, just same as the broker of property and other business-related mortgage.

However, “The new way” has been facing few obstacles, which turns out everyone has house So, the government made “the new way” again  by the government in 1986, called the determination of the Tax Reform. One of its content: mortgage buyer given less tax. It’s also valid for the purchase of another house. It meant that, even though it has a house, if you wanted to buy another house, it’s still be included in the facility.

In developed countries, if there is any tax relief will get incredible. In the developed countries are very high taxes. In fact, as in Swedish or Danish, person’s salary will get the tax up to 50 percent. As the impact, all the necessities of life such as school fees and health care are free. The future life are also guaranteed.

The tax Relief facilities increases the mortgage atmosphere business dramatically in 1990. And this passion real estate keep rise to the next 12 years. These mortgage loans are usually about US$ 150 billion per year increased sharply immediately twice tothe following year. Even the numbers keep rise a few years later and even in the 2004 reached almost USD 700 billion per year.

Continued to part 5

Related posts:

1. Mortgage crisis, causes of financial crisis in USA and World (part 1)
2. Mortgage crisis, causes of financial crisis in USA and World (part 6)
3. Mortgage crisis, causes of financial crisis in USA and World (part 3)
4. Mortgage crisis, causes of financial crisis in USA and World (part 2)
5. Mortgage crisis, causes of financial crisis in USA and World (part 7)

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