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

[easternuts]

We had a mortgage for 30 years before paying it off recently on our modest home. Now we consider ourselves home owners.

Dd rents because she doesn't want to pay the bank more in interest than the cost of her rent is. Yes her rent can go up but so can your mortgage.

I've had friends of mine make snide comments that dd is going on another holiday when she doesn't own her own home. This is as opposed to their own children who have recently bought with 95% or 90% mortgages in a part of the country where a 3 bed house is less than £150k.

AIBU to think that you don't own your own home just because you have a £15k down payment. DD has far beyond what is needed for a deposit but it makes zero sense in central London at present.

If the bank own it, can they sell it on without asking you?

This.

I once bought a house that had been repossessed. That lady definitely didn't own her house anymore!

I’m not sure I understand your point though. If your daughter could make more on the stock market than buying a house with a mortgage over decades that’s fine but she’s still need somewhere to live so would be paying rent plus investing in the stock market as well. Unless you mean she’d get a bigger return paying both?

I “own” my home so I’ve not been in the renting game for a while but it was my understanding that private rentals tend to be higher than a mortgaged property and if the landlords mortgage increases, they will pass those costs on to their tenants.

It sounds a little like your daughter is having to justify her reasons for not buying which is a shame (as it’s no one else’s business) but I don’t think this is a strong argument against buying.

The bank don't own it, they have a charge against it. This is only relevant if you default on the debt, they are then first in line to get paid via the proceeds of your house.
Completely different thing to "You don't own it, the bank do".

I agree with you. You don't truly own the house until the mortgage is paid off. Until then, you are effectively in debt or in a financial position where you can afford 2K repayment a month, which is great, but you do not own an asset worth 1M.

DH drives me nuts with this. He loves to talk about how successful and amazing some of his friends are by using "they bought this house here and they bought that house there" as justification. All of these people are mortgaged up to their eyeballs for the next 30years and about 1-2M in debt. I keep trying to explain this point to DH but he assumes that as soon as someone gets a mortgage for something, they should put on a pedestal as if they own it outright.

I've paid rent for 20 years...if I'd been able to get a mortgage I'd own a hell of a lot more house than I do now. Yabu.

I own my home outright as couldn’t get a mortgage (complex situation) so had to buy it outright. Honestly, I would have own my home either way and would have 100% felt equally a homeowner if I had a mortgage right now. In fact, I am pissed I had to wipe out everything I had on my accounts to buy outright as financially it made a lot more sense for me to be mortgaged than to buy outright.

Renting makes very little sense, as you are essentially buying someone ELSE a home and making yourself vulnerable financially and housing wise (rent tend to increase with little notice, you might have to move every few years, repairs might not get done in a timely fashion). Most people have to rent because they can’t buy and that’s fine but I think if given the choice it’s almost always better to buy than to rent.

No I own my own home, I don’t have to worry about housing security which is the main source of stress for young people right now (I am in my late 20’s so I assume I am a similar age to your DD) most of my friends are in serious precarious situations due to how tight the rent market is (I have friends from many many countries and it’s an international issue at this point). Most of my friends pay 3 times in rent what a mortgage on the same flat would be. Yet they aren’t in a position to buy so are stuck having to pay crazy rent prices and being at the mercy of landlords.

Honestly it’s crazy the freedom buying gives you, I understand also the +++ of renting as I rented for the last decade, but if given the choice between investing in one self and paying towards other people’s financial growth it makes very little sense picking the second option.

Your daughter doesn’t even have to buy in London. She could buy somewhere else (outright if she has the amount) and stay renting in London while renting her other property for example (so at least her own rent is partially paid by the house she owns or so the rent pays for the mortgage of the house she owns).

Ah gosh, look i think the most important thing here is that you let everyone know that she has WAY more than any deposit, and you can still feel superior.... thats what really matters to you isnt it.

If she wants to pay someone else's mortgage so that they can own her home instead of her, that's up to her. What you're saying doesn't make a massive amount of sense to me but it's her money and her life.

But where have you got £2k from?
We "own" our 4 bed detached home in a desirable market town and it costs us £500 a month. To put this into perspective, we were paying £750 a month in rent for a 1-bed flat in 2006.

It is possible to invest your money into something that has a better return than property. So if i had money to invest I wouldn't be interested in having a property portfolio. However, when you are looking at buying your main residence Vs renting, I might be very ignorant, but I don't know anyone who pays less to rent. The people I know who are fairly open would be paying substantially more to rent the same size accommodation Vs their mortgage payment. Plus we will all own our property one day. I do think London might be an anomaly, and if in a transient phase of life (getting started in a career) then renting has advantages. But op, I hope your DD has sound financial advice for her future...

No, because the courts transferred ownership. The mortgage company can’t just chuck you out without a legal transfer because you own the property.

Same as in a divorce. The fact that the court has the power to transfer a property to the wife as part of the divorce doesn’t mean the husband didn’t own it when it was in his name.

umm she won’t ever be a homeowner if she doesn’t start paying a mortgage at some point will she? Meanwhile she’s paying someone else’s mortgage. If she were really switched on she’d be using this massive pot of money you say she has to purchase a but to let while the income pays her rent. Personally I can’t imagine the tedium of living in the same home for 30 years, I say that as a homeowner. I think you’re projecting your own snobbishness onto others, perhaps you’re more bothered about your DD not owning than you’d admit

Who the hell else owns it then 🤷‍♀️

If having a mortgage still means you’re not a ‘homeowner’, why is my name on the deeds at the land registry.

Do people say the car company owns your car when you’re paying that off.

There’s a whiff of sour grapes from those who say otherwise.

Surely if that was the case, no one would ever buy?

What kind of investments would you recommend that are better than owning property?
According to you, the bank owns my house, but all being well, I will own it outright in about 8 years. As it stands my 200K house is now worth 350K. Even if I defaulted on my repayments now, I'd get back way more than I put in.

Rental money is gone forever.

I agree, until you have paid back the mortgage in full, the bank own it.

Insofar as your lender isn't going to knock on your door and take possession of your property while you are fully up to date with your mortgage payments, and possibly overpaying, you might as well say you own it.

(subtext.... with a mortgage on the outstanding amount, and with you as the occupier having some equity).

The above is so longwinded, people just say I own my home.

Quite!

Nope not at all. We weren't pillocks who overstretched. Dp has been out of a job since before christmas and it's had zero impact as we were sensible. I'm happy I'm MY home.

I have paid 60k renting a HA home for years and years. I am in a much much better place now. As a homeowner.

If you've got 60% equity in the property , the bank doesn't "own" it, full-stop.

it cuts both ways.

Would you be worried that the bank might ask you to move out or move someone else in instead of you?

Where is anyone buying a house with £15k for a deposit?! Your daughter may have more cash in her pocket now partly because she's choosing to live in central London, personally I wouldn't want to be on a pension and still paying rent. In her shoes I'd consider buying elsewhere and letting it while it suits her to stay in the city.

So by your logic, if a house with a market value of say £1.5m still had a mortgage of £100k outstanding, the bank owns it and the mortgage holder doesn't?
See how ludicrous that is?