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

propertyman

A tenant in your own home- not so sure about that.

Perhaps a silent ish business partner, who, for 30 years, has you by the gentleman's vegetables?

Mrs_Arcanum

How would this work if you started off with over 50% deposit with only the remainder mortgaged?

Itismehonest

G_M wrote: »

....

Itismehonest wrote: »

I'm pointing out the difference between having a mortgage & owning a mortgage-free (total ownership) property. .

G_M wrote: »

No. You started out by saying

Quote:
From what I've been lead to believe, when you buy a house with a mortgage, it's pretty much just like renting
/Quote

You were comparing ownership (albeit with a mortgage) with renting.

Now you seem to want to compare debt-free ownership with ownership where you've borrowed money.

Make up your mind!

:rotfl: Actually I think you'll find that the "From what I've been lead to believe, when you buy a house with a mortgage, it's pretty much just like renting" was in the OP & not in my posts at all.

sims01

timmyt wrote: »

a mortgage house/flat - the borrower owns it as their name will be on the registered deeds (or unregistered conveyance) but a separate document called a mortgage/charge has been entered into with the Lender on the basis that the owner/borrower (nothing changes there) will forfeit the house (the proceeds in other words) to the extent of the amount of the mortgage if the borrower/owner does not keep to the terms of the mortgage.

Not quite. Regardless of what the terms of the mortgage are, the borrower is the full owner of the property and it is entirely lawful for them to do whatever they wish with the property (within the limits the land registry charge imposes, i.e. they can't transfer it until the charge is gone), including breaking the terms of the mortgage.

However, if they do break the terms of the mortgage, the lender has the right to demand immediate repayment of the entire mortgage including any applicable penalties (the 'demand for immediate payment of any sums due to us' from the RBS mortgage terms you linked) . If at this point, the borrower can satisfy this payment demand by any means, the charge on the property is extinguished. Only if the borrower defaults at this stage can the lender start repossession proceedings and acquire an ownership stake in the property.

For most people, the distinction is not that relevant though because few people will have the means to clear their entire mortgage at short notice.

ReadingTim

sims01 wrote: »

For most people, the distinction is not that relevant though because few people will have the means to clear their entire mortgage at short notice.

Exactly it! For many people, the only way to clear the mortgage should the bank demand immediate repayment would be to sell the property, hence the confusion; however, as you near the end of your mortgage term, or if granny kicks the bucket and leaves you a large wedge of cash, it becomes possible to repay the outstanding amount without selling the property

ukcarper

sims01 wrote: »

Not quite. Regardless of what the terms of the mortgage are, the borrower is the full owner of the property and it is entirely lawful for them to do whatever they wish with the property (within the limits the land registry charge imposes, i.e. they can't transfer it until the charge is gone), including breaking the terms of the mortgage.

However, if they do break the terms of the mortgage, the lender has the right to demand immediate repayment of the entire mortgage including any applicable penalties (the 'demand for immediate payment of any sums due to us' from the RBS mortgage terms you linked) . If at this point, the borrower can satisfy this payment demand by any means, the charge on the property is extinguished. Only if the borrower defaults at this stage can the lender start repossession proceedings and acquire an ownership stake in the property.

For most people, the distinction is not that relevant though because few people will have the means to clear their entire mortgage at short notice.

Or will have to.

G_M

a mortgage is just a big loan. Beacause it is big, the risk for the lender is big. Hence the security.

With any loan, whether for a new washing machine, holiday, car whatever, if the borrower fails to repay, the lender can go to court to get his money back.

With a mortgage, if the borrower fails to repay the loan, the lender can..... go to court to get his money back. The only difference is that due to the fact that mortgage loans are so big, in 999 times out of 1000 the only way the court can ensure the lender does get that money back is by using the property (repossession and sale). Hence the repossesion clauses and laws relating to mortgages.

It's just a big loan, that's all. Nothing to do with ownership.

firsttimetom

Helen_J wrote: »

A mortgage granted over a house does not mean the lender is the owner. That's the beauty of mortgages. They allow people the chance of home ownership without requiring £200,000 etc up front which Average Joe doesn't have.

You could argue though that without the existence of mortgages, House's would cost a fraction of what they do now. (Assuming there is also legislation to prevent people buying more than 1 and preventing people who do not reside in the UK to buy property).

We'd be in a much better situation as well. No dependencies on banks, more disposable income, lower wages would would make us more competitive globally, and we'd probably still have a real economy not the services/house prices/consumer economy we have been reliant on.