To think having a house with a mortgage is not 'owning your own home'

I'm wondering if there are differences between the nations regarding who holds the deeds. I'm in Scotland and had to engage a solicitor to retrieve the deeds from bank (First Direct). This was within the past five years and it was to allow the solicitor to confirm to the (Scottish) Land Registry the title was mine and have it registered as such on my behalf.

My friend lives in a very old rented house. Sometimes it needs repairs which can be expensive. These costs obviously get paid by the landlord from her rent payments. Many people struggle to pay large mortgages without being able to afford to set aside a large fund for potential expensive repairs. Then there are people with expensive properties who end up incurring large inheritance tax bills after they die. There are pros and cons to the ownership / rental decision.

This thread is amazing. Even from the OP, unable to appreciate that after 30 years of paying a mortgage, OP owned a capital asset outright. And after 30 years of paying rent, you do not.

No one can predict the future, but past trends indicate that home ownership is a good bet financially and for stability. Just like any investment, circumstances differ.

You own your home with or without a mortgage. You can change lender and still own the property. You can rent it out; you can take in a lodger. You can extend it, modernise it, raise the value. You can pay thousands and thousands for dull, essential repairs that you'd rather not undertake.

Of course it is up to the OP's dd what she would like to do. She may not want to be tied to property ownership right now, or ever. That's a perfectly valid decision, even if it costs her more, she may prefer the flexibility. Lots of people spend more money to live the life they choose.

All the best to her, wherever she lives.

But, yeah, she would own her own home with a 95% mortgage.

Because a but to let mortgage is a different mortgage. At the very least the lender has a different responsibility to you. They need to know you can pay the mortgage and the rent you are charging is sufficient for the rent. Btl mortgages are also not regulated by the fca

you also need to inform your insurance company. They don’t own the house either.

Think if it another way - if your mortgage company owns your house then how can you remortgage to a different company without their permission. You simply pay off the mortgage through a loan from someone else. If they don’t like that you are renting out the house - you find a different lender.

I apologise - I thought you were being snippy. I perhaps picked up a tone that wasn’t there.

this thread has depressed me😊

Absolutely. Hence I thanked you. No need for the lecturing rant though.

If you "own" your home when you have a mortgage, why is it you need approval of the bank/mortgage lender before you can rent it out?

Fair enough. There's a third category: the outliers who read the paperwork.

Tbf, I was talking about mindsets ie those who don't count chickens until they are hatched (prudent / pessimistic) and those who have sold the eggs before they are laid (not prudent / optimistic).

How much in total have you paid on your mortgage? I calculated that on a house bought for £40k, we paid around £70k in total mortgage payments. When we’d paid it all off, we sold the house for £155k and downsized. So our £70k more than doubled in size over 24 years.

There is just so much financial illiteracy on this thread it needs to be corrected. You used the term equity incorrectly. It needs to be corrected because people are reading this and believing some of the misinformation.

surely you understand why blatantly incorrect information must be corrected?

I agree it’s not a good thing overall, and I worry for people trying to buy even now.
Fortunately, my house was cheap though and whilst a lot more expensive now, still affordable to many people.
I was just illustrating that the sneering over a tiny deposit on a cheap house doesn’t mean you’ll never pay the mortgage off/isn’t worth buying.

Look at the Land Registry, as had already been explained, the house is owned, the mortgage company have a charge or lien against it. I am mortgage free, were I to borrow against it's equity I would still own the house.

No, I do understand equity. I meant to type sale price but it was the middle of the night.

But thanks for pointing out my error.

Apparently correctly telling her that she’s wrong is ‘nasty’. I find it interesting that the only person making personal remarks and snide digs on this thread is @ArthurHeDoesAsHePleases but anyone politely correcting her has an ‘attitude’.

So far you’ve said the bank owns the house and also said the bank holds the deeds until the property is paid off.

Since the first is legally incorrect and the second hasn’t been the case for decades, I can’t comment on your knowledge of other things in life but you clearly know nothing about how home ownership works.

Careful with your nasty attitude there.....

And nastiness? Give over.

I consider myself very financially prudent. I’ve paid off my mortgage, am well on track for retirement and save half my salary each month.

I considered myself a homeowner from the minute I bought my first flat (with a mortgage).

Of course, I made sure to read the documents and understand the law around my ownership. This thread makes it clear a lot of people don’t do that.

Attitude? What being correct? 😄

Again please do some basic research before making silly statements.

we are not all 3 pay checks away from being homeless!

about a third of owner occupied homes are owned outright. And lots of people who rent or have mortgages have savings - or partners who work!

yes some people are three paychecks away from being homeless but not everyone.

Some people on this thread don’t seem to be able to think through basic arguments!

I think you have misunderstood what equity is.

AIBU to think that you don't own your own home just because you have a £15k down payment

Then who owns it? Yes, you own it but have a loan from a financial institution who can take steps if you don’t pay them.

Let’s say you see a coat you like while out shopping with a friend and lament not being able to buy it as you are 20 quid short. The friend offers to loan you the money to buy the coat as long as you pay by end of next month or give them repayments over 4 months, and you agree. You buy the coat. It’s your coat. If you fail to repay the friend there may be repercussions, but it’s your coat. The only difference with the bank is you have signed a contract that says they have a right to repossess and get the money they are owed if you don’t repay as agreed. Theoretically the friend lending money for the coat can do the same thing but just can’t be arsed.

I have rented & I have owned

When you rent there are lots of rules

When you own, you can do what you like !

I prefer to own

I used to say I rented my home from the bank. Now it's mine i.e. mortgage free.

Sure, I ticked the 'homeowner' box on forms but, in my heart, I understood it was not mine whilst the bank held a charge over it. Of course I could sell, but I was not entitled to the entire equity because the bank's share (outstanding mortgage) took priority over mine.

It's a mindset thing, I guess.

Those of us who are financially prudent think the way I do i.e. we don't own until the mortgage is cleared and the property is registered with no charge over it.

Those who are less prudent believe they 'own' immediately after they've made their first (debt) payment.