Who owns a mortgaged house? the "owner" or the bank?

HappySaver1968

Hi,

Looking for a little advice please. From what I've been lead to believe, when you buy a house with a mortgage, it's pretty much just like renting whereby you pay your mortgage every month for a set period of time until finally, maybe a good 20 years or so down the line, you end up being mortgage free and by that stage, you're the owner through and through. If I'm correct, why do people say they've "bought" a house when really they should say they've just "mortgaged" a house? I don't mean to offend but it seems silly to say you've "bought" it when, in actual fact, the real owner is the BANK!

John :beer:

silvercar

Well you own it in that you can do what you like with it without having to get someone's permission. So you can live without magnolia paint in each room, you can landscape your garden etc

BitterAndTwisted

I cannot answer your question about what other people say and think. You are correct, until the mortgage is settled in full the "buyers" are in fact just renting the property from the bank.

HappySaver1968

silvercar wrote: »

Well you own it in that you can do what you like with it without having to get someone's permission. So you can live without magnolia paint in each room, you can landscape your garden etc

That's always got to be an improvement

John.

Itismehonest

It's the bank's property until you've paid them for it in full but you have the right to treat it as your own within limits the bank & the law set.

G_M

No. You have bought the house. It is yours. You own it.

The Title Document at the Land Registry will show your name as the owner.

However, you have borrowed money in order to buy it, just as you may borrow money from your credit card to buy a new suit/dress. The key difference is that the loan on the house has conditions attached to it, mainly that you cannot sell the house without paying it back. (there are one or 2 others..)

But meanwhile, for 25 years (or whatever) you can redecorate, extend, modernise, do whatever you want in YOUR house - unlike in a rented property.

Oh - and unlike a rental, you can't be asked/told to leave just because the landlord/bank wants you to.

Thrugelmir

HappySaver1968 wrote: »

in actual fact, the real owner is the BANK!

The bank merely holds a mortgage (legal charge) over the property to secure a debt. The title to the property belongs to the purchaser not the bank.

No different to a Company which borrows from a bank. The shareholders still own the Company. While the bank will hold a floating debenture over the Company's assets.

keith969

It's your property, you own it, however the bank or whoever issued the mortgage on it have lent you money and have that money secured on the property. Meaning that if you do not repay them as an when required, they can issue proceedings to repossess.

Itismehonest

G_M wrote: »

No. You have bought the house. It is yours. You own it.

The Title Document at the Land Registry will show your name as the owner.

However, you have borrowed money in order to buy it, just as you may borrow money from your credit card to buy a new suit/dress. The key difference is that the loan on the house has conditions attached to it, mainly that you cannot sell the house without paying it back. (there are one or 2 others..)

But meanwhile, for 25 years (or whatever) you can redecorate, extend, modernise, do whatever you want in YOUR house - unlike in a rented property.

Oh - and unlike a rental, you can't be asked/told to leave just because the landlord/bank wants you to.

True but, when push comes to shove, there's not much difference between a car on finance & a house with mortgage.
Until you've made the final payment it isn't totally yours to do with as you wish. If it were then 'owners' wouldn't have to, for instance, seek permission to let etc.

G_M

I don't understand this 'totally yours' issue.

NOTHING in the world is "totally yours to do with as you wish." There are 1000s of laws which limit what you can/can't do with things you 'own'. Your TV may be 'totally yours' but you still have to pay for a TV licence. Your bikini may be 'totally yours' but you can't wear it in Tescos. There are limits of all sorts on things you 'own'.

Even your life is not 'totally yours to do with as wish'!

So yes, like so many other things, your property is subject to restrictions, and these increase if you choose to borrow money against it. So what?

Itismehonest

G_M wrote: »

I don't understand this 'totally yours' issue.

NOTHING in the world is "totally yours to do with as you wish." There are 1000s of laws which limit what you can/can't do with things you 'own'. Your TV may be 'totally yours' but you still have to pay for a TV licence. Your bikini may be 'totally yours' but you can't wear it in Tescos. There are limits of all sorts on things you 'own'.

Even your life is not 'totally yours to do with as wish'!

So yes, like so many other things, your property is subject to restrictions, and these increase if you choose to borrow money against it. So what?

I'm pointing out the difference between having a mortgage & owning a mortgage-free (total ownership) property.
Those who have no mortgage are responsible for all decisions made about their property - obviously while keeping to the law. They can let or bequeath as they wish.
Those who have mortgages are not in the same position.

A mortgage is really only a form of what was called Hire Purchase when I was young. You get the goods up front but they aren't fully yours to do (legally) what you want with until you've finished the payments.