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.

YABU and I'm sure you know that. Of course people with mortgages are home owners; they own their home with the help of a loan from the bank. It is in their name, they can do with it as they please, it is theirs. And in 30 years or so, it'll be theirs in its entirety. You could rent for 50 years and have absolutely zero equity in the property. If your daughter wants to live in Central London and has such a large deposit as you suggest, she'd probably be better off getting a mortgage on a flat than quite literally throwing money away on rent.

Rents in my area have gone from £750 a month to £1200 a month for a 2 bed over the 10 years I have lived here.

I had a decent deposit but I started out owing £500 each month on my mortgage for a similar property and I’ve now paid off the mortgage partly with overpayments and partly by way of a lump sum I was able to save as a result of my low mortgage payment.

I fully accept I am responsible for maintenance etc. when a tenant isn’t and originally I suspect my ‘living in my own home’ cost was about the same as rent on a similar property (so £750 a month). The recent cost of renting (£1200) is significantly higher than my mortgage + maintenance cost was (probably about £850 taking into account price rises) and now my mortgage is paid off, it’s £1200 v £350 (maximum - I don’t spend anything close to that much but I assume there could be a big bill around the corner).

Even if I end up having to sell for less than I bought (hopefully not as similar properties have gone up), I’m likely to still end up better off than renting for the same time period. Renting for 10 years would have cost me £90,000 of ‘dead’ money if the rent stayed at £750 (which it wouldn’t have done). Instead, I have that money in equity (and hopefully a lot more) and I’m currently not required to pay anything to live here. Even if I have to sell for £50,000 or £60,000 less than I paid (hopefully not but you never know) I’m still better off having bought.

"they can do with it as they please"

I think you'll find they actually can't.

Man this thread is really worrying, there are so many people, by the sounds who have a mortgage but don’t seem to understand that they own the house. Super worrying that this wasn’t understood at the point of contract/ sale

For instance?

I don't think it matters so much for people who have a mortgage as presumably they pay their payments and are aware that one day they won't have to pay any more.
It would worry me perhaps that one partner would not have their name on the mortgage and think that it didn't matter as the bank owns the house.
The more worrying thing is the people here who seem to think renting and paying a mortgage are more or less the same thing because they think that a mortgage means "owned by the bank". It might put people off, people who would actually benefit from having a mortgage.

It depends on the type and terms of the mortgage as they all differ, but usual possibilities are :

You can't rent it out without the banks permission or changing the details or terms of the mortgage. The bank may/may not allow you to do this.

You can't sell any part of it without the banks permission. For example selling off a proportion of the land.

You can't make any modifications that will materially affect the value in a negative way.

There are a number of other usual things as well, but you should look at the terms of the mortgage to see which ones may/may not apply.

Agreed on the deterrent factor but from a governance and sales point of view, people should really be understanding what they are signing, it’s the whole point of suitability

Guess what.

We paid the mortgage off a couple of years ago (I was joking about Barclays turning up for those hard of thinking) and the only thing I can do differently now is rent it out without having to change to a different mortgage product

I am still answerable to the laws of the land with regard to what I can and cant do with the house

I cant bulldoze it down, blow it up, start adding on illegal extensions or additions. I cant rent it as an HMO without the relevant permissions from the council. I can get a lodger just as I could before. I could get a pet, just as I could before, I can have friends and family stay just as I could before.

I can even change that god awful carpet thats been there since we moved in.

because a BTL mortgage is a different mortgage that’s why. You can apply for a consent to let to transition the mortgage from a owner occupier to BTL but a BTL mortgage isn’t a regulated mortgage firstly, secondly the rent charge has to be calculated to ensure it covers the icr, to ensure the customer won’t fall into arrears, and then the bank is failing its obligation to responsible lending (and it makes no financial sense fo lend to so a person who can’t pay the bill)

selling off the land is because you’ve used the property (including the land) to secure the loan so that just doesn’t make any sense. But if you had a large acreage that you didn’t need and it was on mortgage you most certainly could approach your lender and say you want to sell it, it would likely require a new valuation.

My LTV is in single figures now so I feel I am a "home owner", I paid for and own the vast majority of my house. Renting is dead money. I really wish there was a solution in this country, a lot of luck and timing went into my housing situation and it could have been so very difficult and different.

Sorry but this absolutely is happening TODAY.

One bedroom flat purchased at the grand old age of 22 with a 5% deposit for £105,000. In the "oil property of Europe" in 2013. You couldn't buy anywhere, every property was going for £20k, £30k, even up to £60k above asking. Every viewing, there were 5+ other people viewing at the same time.Every property was going to a closed bidding system, we bid on seven properties and didn't get any. We got lucky with the flat, due to an admin error on the advert nobody could contact the estate agents to arrange a viewing but I went into their offices to request a viewing and they had wondered why this one flat wasn't getting any interest.

Now, 12 years on and several oil and gas downturns later, the exact same flat was valued last year at £47k but (and I quote) "you'll be lucky to get over £42k".

Now this is not helped by the fact the town is a shit hole that's to our useless council and nobody wants to live here anyway, house prices have dropped so much people are no longer buying starter flats and are going straight into 3 bed houses and the fact there are 895 1 bedroom flats for sale within an 8 mile radius and we've got no chance. There is also no chance of prices going back up to what they were here, the place is done.

We did what everyone in this thread is screaming to do, get on the property ladder ASAP and we are totally fucked. We would need £25k to give to the bank to settle the negative equity, plus another deposit, plus solicitors fees etc OR we can mortgage ourselves up to the eyeballs, buy a second property and have to buy the wonderful second property tax. There is no way out of it. We're almost in our mid 30s now and short of a lottery win I don't know how we will ever get out of this.

So, whilst I agree that we technically own the home despite the mortgage for 30k odd more than the place is worth, I'd really much rather we didn't for all the fucking good it's done us. It has been the worst decision we ever made.

I agree OP. It’s renting from the bank!

No, it isn't.

Is there actually an infinite number of ways people can fail to understand the concept?

In Nov 22 mortgage rates were quite low.

Rents have gone up because mortgage rates have rocketed.

Okay - I will bite.

How is having a mortgage the same as renting from a bank? I assume you have read all the legal arguments on this thread explaining that the bank doesn’t own the house. But why do you disagree?

Who on earth, unless they were actually deranged, would want to do something to their house that would ''materially devalue it?''

Most people also don't want to sell off parts of their garden, or adjoining paddocks either.

If anyone wants to free themselves from renting, buying IS a good move.

Don't know of anyone who regretted buying in England at any rate.

Well, you say that....

When I had a mortgage back in about 2008, and the banks were in trouble, my bank (one of the big ones that got nationalised) rang me up and asked if I'd consider lending it some of the money back to them. That certainly didn't feel like I was renting my house from the bank 😀

Most people also don't want to sell off parts of their garden, or adjoining paddocks either.

Do you seriously believe that is any sort of counter argument to the point I'm making ?

At least try to think about what you are saying.

Sadly I think people only find out what mortgages really are when they come under financial stress and have to look into the details.

I guess you have found out that there really is one thing that you own when you have a mortgage.

I hope it works out for you in the future...

Oh that shark! I remember him...it was about 12 yrs ago -?

Roof Shark I had to google...He's actually a ''protest'' put up in 1980's! {I didn't know he was that old}

https://en.wikipedia.org/wiki/Headington_Shark#:~:text=The%20Headington%20Shark%20(proper%20name,the%20roof%20of%20a%20house.

Where is this, if you don't mind saying? Roughly.

It sounds phenomenally cheap. What caused the fall in prices? Economically deprived area? fewer jobs?