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.

The person named in the land registry is the legal owner. The mortgage company will have a “standard security” deed which only entitles them to the property if the loan isn’t paid. Over the years, of course, the owner’s equity increases as the loan is paid off, assuming a repayment mortgage. That’s not the case with an endowment mortgage, which is a different debate.

I can assure you, it's very unlikely you would be able to miss 'years' of mortgage payments without the property being repossessed. The law states 2 months, as I said, but out of consideration for the cost of living crisis, have agreed to not commence proceedings for 6 months. Although if you refused to engage, which many do because they bury their head in the sand, the proceedings will be pretty prompt.

That's what I mean by "owning".

I'm sorry, but when it comes to legal documents, the actual legal meaning of ownership is what counts. If the bank tried to convert your loft and claimed that was what it meant by owning, you'd have something to say!

Well, you don't own it outright if you are paying off a mortgage, but you are on the way to owning a house, more than if you are renting. Differing semantics there.

Who are these people who criticise your daughters choices?
I rented for years and I remember my mum telling me her friends had made similar comments about me.
But to me renting wasn't throwing money away at all, I wanted the freedom and the independence. What I liked about it was partly the lack of permeance! I didn't see any point getting a mortgage in my 20s or even trying to.
My partner got a mortgage when he was 21 (before we got together) and he grew to hate it as he felt too young to be a homeowner and that he had missed out.

Let your daughter enjoy it.
If your friends or their kids don't like it they can jog on.

No you're quite right. I meant of landlords with mortgages, they are nearly all interest only! Thank you for the correction.

There are definitely situations where it makes more sense to rent, but ultimately the sooner you get a mortgage, the sooner you own your home without one. Which, as your post says, is the best situation of all.

Not just cos you have more money in your pocket each month but because renting while retired is a pretty terrifying thought based on the average person's retirement income. All recommendations for how much to save for retirement are based on the premise that you won't have rent or a mortgage to pay.

Does it make more sense for your daughter to eg save up so when she buys, she has a bigger deposit? Could certainly be the case, especially with today's healthy interest rates on savings. Not everyone is in the position, however, to be able to save a lot while also paying rent, so for them it may make more sense to buy as soon as they are able, without overextending themselves dangerously of course.

But ultimately the best way to be in the position you admit is the best position - owning a home outright - is to get a mortgage. They're not opposites...one is the step to the other!

Ah I knew there would be a back story to your attitude.

Understanding how the world works can hardly be described as an "attitude".

I'm retiring in 5 years and I pay my mortgage off next year. I can then put all the money I usually pay into savings to boost my pension. When I retire I won't have to worry about paying rent. If I had to pay rent out of my pension and private pension I wouldn't have two pence to rub together.
I have enough in savings to cover new boilers, repairs and what have you and I'll have enough to keep my car going.
I can't think of anything I'd be able to rent on a pension other than a bedsit with rents being the way they are.

There is an underlying nastiness in her tone. Please don’t try to tell me I don’t know how the world works. I’m sure I know far more than you do.

People with mortgages have a contract with the bank to own their homes in X amount of years. If they choose to terminate that contract and rent they are renters. If they continue to pay off their mortgage they are home owners. I guess it might be more accurate to call those people equity accruees/accruers.

I'm sure you think you do, alright.

Whatever

This is assuming that you have paid off the original loan and not just the interest… so many of my friends took interest only mortgages thinking they would pay the balance of their large
loan ‘along the way’ but didn’t manage to do that… 25 years later they are having to sell up against their wishes and downsize to pay off the balance which is due … yes their houses are worth more now than they were 25 years ago, but taking into account all the interest payments, home maintenance, decorating and upkeep costs over 25 years, stamp duty and legal fees… they really haven’t got much to show for their ‘investments’! There are other ways to invest money… property isn’t the only way… Home ownership can be stressful, the ‘investment’ can go wrong - a new housing estate spoiling the view, a main road being built close by, rising water levels creating flooding etc etc.. there are many things that can affect individual house prices. Renting is thought of badly in this country but is so common in so many countries across Europe. Renting is fine and can be a joy (no unexpected upkeep
costs - new boiler/roof etc!) with a good landlord and a plan in place for investments/pension for the future. Can be stressful of course, but so can owning! I have been a homeowner and a renter… swings and roundabouts… renting at the moment… very happy!

I'd say even if you don't own all your home at least it's yours rather than paying someone else's mortgage, but it's not really anyone else's business

You do still own your own home though even with a mortgage. The lender can only take ownership if you default on it. The title to the property is still in your name. This is why, if you choose, you can also sell it. So you’re plain wrong frankly

You’re wrong as well then

well, I work in mortgages and I’ll tell you that there is a long list of options we will go through first. Arrears aren’t counted really until 3 full months missed.

repossession costs and it is an absolute last resort, there is a long list before

anecdotally as I can’t speak for all lenders but those with repossession orders I’ve seen have tens of thousands in arrears

YANBU I totally agree.

Homeowners homes are owned by the bank (unless your mortgage free obvs)

Renters homes are owned by their landlord.

We're all only 3 paycheques away from homelessness.

Paying interest, as annoying as it is, is still better than rent because you will also pay money off the debt meaning you build up equity in the home. Paying rent you're left with nothing afterwards.

*you're

..my point is it's all boils down to the same thing: we're all just keeping up with monthly payments ..to whoever that may be.

I think its obvious. Renting is throwing money away. And mortgage in the end you get the house. Plus with the house price going up every year its a big plus for home owner. Sometimes house price going down. But most certainly is going up while the pay rise is not. So have a mortgage house its better than renting.

The banks do not own mortgaged properties. When you buy a house with a mortgage you pay for it by taking out a loan secured against the house which you pay back. If you default on the loan the bank can take possession to then sell it and pay the loan back. On what basis does that mean the bank “own” it.

It is not 'your own home' until the very last penny of the mortgage is paid off to the bank/building society and until the debt/loan is satisfied, it belongs to them!

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