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.

You know what they mean and you are simply splitting hairs.

Other than in older properties owned by one person for literally decades, no properties have ‘deeds’ and the banks don’t hold them because they don’t exist (except possibly as a historical curiosity).

The system started moving from deeds to a central land registry in (I think) 1925 and most property has moved over. Rather than ‘holding the deeds’, a mortgage company registers a charge over the property with the land registry. You don’t even get a physical copy of your land / charge certificate any more.

Given the rent/buy figures I've seen mumsnetters cite for Central London OP's DD has it dead right. General investment advice is that when buying exceeds a sum equal 20 annual rents for a comparable property it makes more economic sense to continue renting. I appreciate this is probably not the case for most of the UK.

https://www.investopedia.com/terms/p/price-to-rent-ratio.asp

🙄

OP, I don't think you understand what a mortgage is.

Formally speaking, yes, you do not fully own a mortgaged house but it is a different feeling (ime) living in mortgaged rather than rented house, and you build equity.

I've got a house and a mortgage. My name is on the deeds so I own the damn thing 🤣 But congratulation to you for being a REAL homeowner, now that you've paid off your mortgage. 👏🏻 Whoop Whoop You!

I much prefer my prospect of paying off my mortgage in 15 years than still be renting in 15 years. Unless your DC is paying rent and saving money at the same time to outright by their own house?!

I don’t have a mortgage (paid off not renting). I also think a person owns a house if they have a mortgage (because that’s what the law says).

I await what snide put down you come up with in lieu of actually knowing what you are talking about with interest.

You do own it, fgs. You just owe the bank the money it lent you to buy it and if you fail to repay, the house can be repossessed to recoup the funds.

If the bank owned it then it could turf you out at any time, even if you are up to date with repayments, and plonk anyone it wants in there. It can't, because it doesn't own it. It just has a charge on it in case you default.

Snide comments?
Friends?
In the same sentence?
Really?

If you’re surprised at the results then sadly that ties in with you not understanding that people who have a mortgage are still homeowners.

When I bought my first flat, I would sometimes think about how little of it I actually owned vs the bank. It was a one bedroom flat with a tiny kitchen, decent living room and small ish bed and bathroom and I think I only owned the kitchen!
I find debt scary so don't like the thought of being mortgaged to the hilt

@easternuts
"No, that's not always true. Paying interest on a loan is throwing money away if house prices aren't rising."
This isn't really true either because at the end of that loan, you will own your home without a mortgage so no further payments due (as you are now discovering for yourself).
When you rent, you will never be in a position to not continue paying as you will never 'pay off' the loan.
Not that the choice to rent is wrong, for many people it is the right choice - if they want the freedom to move at short notice, if they don't want to pay for home repairs, if they can't afford to buy a specific type of property or in their preferred location. But those who do pay off a mortgage will have a home at the end of it that is theirs - no one can evict them or sell it to a new landlord and they will have more financial security into their old age.

Technically your own your house as shown in the deeds, however there is a contractual agreement with a lender who borrowed you a sum that you didn't have at an interest rate over a certain amount of years to acquire the house and if the contract is not fulfilled the house may be reposed by the lender. But technically is yours.
30 years of mortgage paid end in a house of your own. 30 years of rent ends in another 30 years of rent if you don't die before.
Renting is good for those who are starting a career or move a lot form a place to other, for those who settle quick buying a house is the preferred option although with the ups a downs in the market there is always a better timing for buying. Now is not a good time.

If the bank owns it, will they pay for all the renovations on my house.

We have a mortgage, but from our last 3 house moves we've made £250k "profit", tax free, by buying dooer-uppers in gentrifying areas. We get to knock walls down and change our home as we see fit. And most importantly of all, we have the certainty that this is where we will live for the rest of our lives if we like. We recently saw a friend of a friend uprooted from her whole life and support network - kids in new schools, the full works - because her landlord decided to sell and there is a shortage of rental properties in our town.
And then as pensioners, we get to use our full pension for bills and disposable purchases, instead of rent.
Renting is an option, if you need it, but by buying you gain security and an appreciating asset.

Your DD is paying someone else's mortgage for them.

Yes, you are a home-owner with a mortgage. If you take out a loan and buy a thing, you own the thing, you just have a debt too. If you use your credit card in Sainsbury's, does the bank own your bag of apples? Of course not. In the case of a secured loan, the bank has a charge over the house, so they can claim it if you fail to repay the loan - but they don't own it now.

That doesn't mean it's the right time for your daughter to buy, and certainly doesn't mean she can't go on holiday until she buys a house. That's daft and your "friends" don't sound very nice.

As to whether your daughter is better off not buying - well, market forces say that landlords won't want to own a house and rent it to her unless on average they're making a profit compared to selling it to someone else tomorrow and investing the proceeds. And they'll want a profit margin for the effort of owning it and administering the rental too.

But there are other factors that may make a difference, like whether your daughter has enough deposit to borrow money at a good rate, and whether she wants the additional work of home buying/selling and ownership, and whether she may want to move sooner and additional costs of selling would outweigh the benefits of building up equity and not paying for the landlord's profit margin. And what her attitude is to risk; home ownership is more risky than renting certainly in many ways; though if her alternative is to invest in the stock market that might be more risky still.

And then there are non-financial factors. For many who are not sure where they want to be long term it's simply not worth the hassle of buying, even if financially you'd be better off. For others the security of knowing you can't be booted out at short notice when a landlord decides to sell is worth more.

This. I’ve paid my mortgage off. Nothing has changed in the way I live in my house since.

I can still decorate / refurbish etc. mostly as I choose (obviously subject to planning laws - I can’t add 4 stories and a double level basement without permission).

Back when I had a mortgage, the land registry recorded me as ‘proprietor’ on the proprietorship register and the mortgage company were only mentioned on the charges register. Paying off the mortgage cleared the charge but didn’t alter the proprietorship register in any way.

Anyone who is still confused can take a look - it’s £3 on the gov.uk website for information on any address (avoid the dodgy websites that try and charge £30 for the same information).

There’s an awful expectation in this country that buying a house is the only way to go and renting is a sign of failure. I’m sure it’s a generational/Thatcher based thing. Most people in Europe rent and many only buy their first house at retirement.
if you need somewhere to live then you choose the appropriate option that fits your current circumstances. Two of my children rent in Cambridge and will buy when the time is right for them. The other has bought a fabulous and huge flat in the North West for about a third of the price of somewhere similar in London or Cambridge.
They’re grownups and can make the best decisions for themselves.

You sound like one of those stereotypical boomers who has to judge everyone else's choices against yours, just like your friends are doing.

Those in cheaper houses up North have the right idea based on their earnings, I assume. Your DD can't afford to buy in London, so she rents. That's it, surely? Conversation over.

Also, anyone with a mortgage owns that house. The bank has loaned us money in order to have it. I consider myself far safer with a mortgage and good life insurance than renting. I am slightly above the UK average earner, as is DH, so this is our best and safest investment.

Exactly.

Yeah the bank is going to be pretty pissed off when they find out I changed the wallpaper.

They don't.

They have a charge on it. They do not own it.

Your problem is your friends making snide comments to you about your family, not people referring to owning a home when it’s still mortgaged. You’re misdirecting your annoyance here. Hope that helps.

I asked our solicitor, when we bought our first home if we owned it. He said that the legal position was that we did. Four decades later we very much own it as we finished repaying the mortgage 20 years ago. It's now worth 28 times what we paid for it.