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.

Always get a mortgage - mortgages reduce as time goes by {Do not get an interest only mortgage, but a ''repayment''.

Paying rent is insanity, it's just pissing money away.

I did it, {Paid rent} then moved out of London as renting is basically wasting money.

No longer have a mortgage either- House prices generally go up over time, and one has to live somewhere, so why not in one's ''own'' house.

Also to everyone saying that there’s only mortgage or renting - there are other options, you just have to be open to them and also understand that there’s other things you may have to sacrifice to go down a different route (in my example it’s space and maintenance - it takes a lot of work to keep a boat going so you have to be fairly handy and good with living a bit rough, or have deep pockets to pay someone else to do the upkeep..). I’m sure there’s other ways too, this is only one example that I have personally explored and not looked back

I should probably also say that I am European and where I’m from most people rent, or move into their parents places when they decide to downsize and instead of selling buy another place and leave the original home to their children - it’s mostly all flats so it’s a bit different to the uk.

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.

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

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 think you have misunderstood what equity is.

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!

Attitude? What being correct? 😄

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.

And nastiness? Give over.

Careful with your nasty attitude there.....

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.

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’.

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.

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.

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.

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?

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.

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).

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?

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

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

this thread has depressed me😊

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.

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