Pitfalls of Diligent Saving

AdrianC

BikingBud said:

AdrianC said:

BikingBud said:

Home ownership does not occur until the mortgage is paid off

Nope. You own 100% of the property from completion - you just have a large debt secured against it.

Until you pay off the final amount you are a slave to the terms and conditions that the financial institutions may wish to enforce such as interest rates and other whims of the market.

Nope. You agreed to those Ts & Cs when you borrowed the money. They don't change.

We recognise that for IO mortgages why do feel the concept is any different for repayment mortgages?

The only difference between an interest only and a repayment mortgage is whether you repay any of the capital each month or not. That's why, when interest-only were common, you also took out a savings policy alongside it...

Silly me mixing up freedom, and especially freedom from debt, with ownership 

They are very different concepts indeed. Still, now you know, eh?

So people carry an enormous debt over a long time, hundreds of thousands of pounds for 25-35 years, seems crazy doesn't it for an asset you own.

Your choice. You could save up and buy mortgage-free...
Do you eschew finance on other purchases, too? No credit cards, no buy-now-pay-later on a sofa or appliance, no finance on your car?

And you have to be able to keep up with your mortgage repayments or you could lose your home, that asset you own.

Correct. Because it's a secured loan. If it was unsecured, the rate would be much higher to reflect the much greater risk to the lender.
Same as your car could be repossessed if you don't repay the loan.
Or if you get into general debt the bailiffs could take your assets for sale.

Yes, terms and conditions are set at the outset generally to take into account that the business model is about making profit for the bank

Well, of course... That's why they get out of bed and go to the office in a morning.
Do you have a similar objection to receiving interest on your credit balance or investments?

Once you sign, you're committed and unless you pay off the debt, remember ERCs or find someone else to take on the loan, remember ERCs,you are tied to those terms that are likely very favourable for the bank to allow you to claim ownership.

ERCs are only when you're in a fixed period - a discount or fixed rate.
And, yes, you have to repay the money you borrowed. Did anybody tell you otherwise? They lied.

There would not be mortgage prisoners if they had freedom of ownership over their house, this includes IO mortgagees.

Most "prisoners" on interest-only are idiots who never thought about repayment through the term. There's a rather large clue in the name of an INTEREST ONLY mortgage.
People started getting endowment illustrations MANY years ago.
Otherwise, "prisoners" are people whose income simply doesn't support remortgaging any more, or whose HUGE LtV loan pre-crash (over a decade ago) is still too large an LtV to remortgage.

You are extremely unlikely to be able to demolish and rebuild, the asset you own.

And we're back to the loan being secured against the property.

New houses with restrictive clauses that limit your choices and tie you into approvals and payments for property that you own.

Nothing to do with whether there's a mortgage or not on the property. Nobody ever forced anybody to buy a newbuild.

Crashy_Time

Mickey666 said:

BikingBud said:

Mickey666 said:

 That doesn't make much sense to me.  A very effective way to "have us over a barrel" is to prevent us from being independently wealthy.  Restricting people to rented housing for their whole lives means they are always beholden to someone else for one of the most fundamental human needs - shelter, a home.  It's a very effective means of oppression and forces people to work all their lives, historically until they dropped. 

Home ownership gives people a greater degree of independence, wealth, choice.  If you really wanted to have people "over a barrel" then preventing them from owning their own homes is a very effective way to do so . . .  as it was historically in more feudal times.

Home ownership does not occur until the mortgage is paid off, and often inhibits independence, this is especially so where we find people tied to mortgages for their entire working lives by 30 and 35 year mortgages.  Yes you may be able to hang whatever wall paper or put whatever coloured bathroom suite in that you desire, however, you are still tied to many years of payments before you "own" the property.  Until you pay off the final amount you are a slave to the terms and conditions that the financial institutions may wish to enforce such as interest rates and other whims of the market. 

We recognise that for IO mortgages why do feel the concept is any different for repayment mortgages? If you owe you don't own!

That's not legally correct.  The LR title defines the legal owner and that will be the mortgagor, not the lender.  A mortgage is simply a loan secured on your property, your legally-owned property.

But of course you're right that if you have a mortgage then you are a 'slave' to their repayment terms, in the same way that if you rent your home you're a 'slave' to your Landlord's terms.  The big difference, of course, is that a mortgage will eventually end, unlike renting.

It is easier to change landlord though than change mortgage, you are basically not going to be able to dictate terms to a mortgage lender whereas you can move to more favourable rental terms (price, location, landlord etc.) anytime you want? 

Crashy_Time

AdrianC said:

BikingBud said:

Home ownership does not occur until the mortgage is paid off

Nope. You own 100% of the property from completion - you just have a large debt secured against it.

Until you pay off the final amount you are a slave to the terms and conditions that the financial institutions may wish to enforce such as interest rates and other whims of the market.

Nope. You agreed to those Ts & Cs when you borrowed the money. They don't change.

We recognise that for IO mortgages why do feel the concept is any different for repayment mortgages?

The only difference between an interest only and a repayment mortgage is whether you repay any of the capital each month or not. That's why, when interest-only were common, you also took out a savings policy alongside it...

https://www.bbc.co.uk/news/business-20858236
Sums up the property ponzi perfectly IMO.

grumiofoundation

Crashy_Time said:

Mickey666 said:

BikingBud said:

Mickey666 said:

 That doesn't make much sense to me.  A very effective way to "have us over a barrel" is to prevent us from being independently wealthy.  Restricting people to rented housing for their whole lives means they are always beholden to someone else for one of the most fundamental human needs - shelter, a home.  It's a very effective means of oppression and forces people to work all their lives, historically until they dropped. 

Home ownership gives people a greater degree of independence, wealth, choice.  If you really wanted to have people "over a barrel" then preventing them from owning their own homes is a very effective way to do so . . .  as it was historically in more feudal times.

Home ownership does not occur until the mortgage is paid off, and often inhibits independence, this is especially so where we find people tied to mortgages for their entire working lives by 30 and 35 year mortgages.  Yes you may be able to hang whatever wall paper or put whatever coloured bathroom suite in that you desire, however, you are still tied to many years of payments before you "own" the property.  Until you pay off the final amount you are a slave to the terms and conditions that the financial institutions may wish to enforce such as interest rates and other whims of the market. 

We recognise that for IO mortgages why do feel the concept is any different for repayment mortgages? If you owe you don't own!

That's not legally correct.  The LR title defines the legal owner and that will be the mortgagor, not the lender.  A mortgage is simply a loan secured on your property, your legally-owned property.

But of course you're right that if you have a mortgage then you are a 'slave' to their repayment terms, in the same way that if you rent your home you're a 'slave' to your Landlord's terms.  The big difference, of course, is that a mortgage will eventually end, unlike renting.

It is easier to change landlord though than change mortgage, you are basically not going to be able to dictate terms to a mortgage lender whereas you can move to more favourable rental terms (price, location, landlord etc.) anytime you want? 

One you can do online a the click of a few buttons whereas the other generally requires packing and unpacking all your possessions?

Or do you mean change mortgage in the sense of selling and buying a home? (Which is obviously a longer process than moving rental properties but isn't really just 'changing mortgage') 

Crashy_Time said:

AdrianC said:

BikingBud said:

Home ownership does not occur until the mortgage is paid off

Nope. You own 100% of the property from completion - you just have a large debt secured against it.

Until you pay off the final amount you are a slave to the terms and conditions that the financial institutions may wish to enforce such as interest rates and other whims of the market.

Nope. You agreed to those Ts & Cs when you borrowed the money. They don't change.

We recognise that for IO mortgages why do feel the concept is any different for repayment mortgages?

The only difference between an interest only and a repayment mortgage is whether you repay any of the capital each month or not. That's why, when interest-only were common, you also took out a savings policy alongside it...

https://www.bbc.co.uk/news/business-20858236
Sums up the property ponzi perfectly IMO.

As current as ever...

Mickey666

Crashy_Time said:

Mickey666 said:

BikingBud said:

Mickey666 said:

 That doesn't make much sense to me.  A very effective way to "have us over a barrel" is to prevent us from being independently wealthy.  Restricting people to rented housing for their whole lives means they are always beholden to someone else for one of the most fundamental human needs - shelter, a home.  It's a very effective means of oppression and forces people to work all their lives, historically until they dropped. 

Home ownership gives people a greater degree of independence, wealth, choice.  If you really wanted to have people "over a barrel" then preventing them from owning their own homes is a very effective way to do so . . .  as it was historically in more feudal times.

Home ownership does not occur until the mortgage is paid off, and often inhibits independence, this is especially so where we find people tied to mortgages for their entire working lives by 30 and 35 year mortgages.  Yes you may be able to hang whatever wall paper or put whatever coloured bathroom suite in that you desire, however, you are still tied to many years of payments before you "own" the property.  Until you pay off the final amount you are a slave to the terms and conditions that the financial institutions may wish to enforce such as interest rates and other whims of the market. 

We recognise that for IO mortgages why do feel the concept is any different for repayment mortgages? If you owe you don't own!

That's not legally correct.  The LR title defines the legal owner and that will be the mortgagor, not the lender.  A mortgage is simply a loan secured on your property, your legally-owned property.

But of course you're right that if you have a mortgage then you are a 'slave' to their repayment terms, in the same way that if you rent your home you're a 'slave' to your Landlord's terms.  The big difference, of course, is that a mortgage will eventually end, unlike renting.

It is easier to change landlord though than change mortgage, you are basically not going to be able to dictate terms to a mortgage lender whereas you can move to more favourable rental terms (price, location, landlord etc.) anytime you want? 

You're not going to be able to dictate terms to a landlord either.  And of course home owners can move to more favourable mortgage terms (price, location, lender etc) anytime they want (yes, you need to sell your house, but renters are usually tied in to a minimum 6-month tenancy anyway and I've managed to move home as an owner quicker than that before now).   It's not always frustration-free of course, but neither is moving between rented properties.  At the risk of being called sexist, I'd liken it to childbirth - it can be a painful process but the rewards are so great that many women choose to do it again.  And again.

I've moved home as an owner many times, and I'd guess that most home owners on here have done it as well. and each time to move was more favourable for a number of reasons.  In fact my last move as a home owner was so much more favourable that I was able to retire at 50 because I was able to release a whole load of equity by moving to a cheaper property.  Try doing that while renting.

Crashy_Time

You can`t dictate mortgage terms online at the click of a button.

Mickey666

Crashy_Time said:

AdrianC said:

BikingBud said:

Home ownership does not occur until the mortgage is paid off

Nope. You own 100% of the property from completion - you just have a large debt secured against it.

Until you pay off the final amount you are a slave to the terms and conditions that the financial institutions may wish to enforce such as interest rates and other whims of the market.

Nope. You agreed to those Ts & Cs when you borrowed the money. They don't change.

We recognise that for IO mortgages why do feel the concept is any different for repayment mortgages?

The only difference between an interest only and a repayment mortgage is whether you repay any of the capital each month or not. That's why, when interest-only were common, you also took out a savings policy alongside it...

https://www.bbc.co.uk/news/business-20858236
Sums up the property ponzi perfectly IMO.

Hmm.  25 years to keep track of whether their endowment policies were on track to pay off their capital loan but they kept their heads in the sand and did nothing about it?  I had an endowment mortgage in the late 80s/early 90s and it quickly became apparent that it wasn't going to end well, so I did something about it while I still had plenty of time.  

Crashy_Time

Mickey666 said:

Crashy_Time said:

Mickey666 said:

BikingBud said:

Mickey666 said:

 That doesn't make much sense to me.  A very effective way to "have us over a barrel" is to prevent us from being independently wealthy.  Restricting people to rented housing for their whole lives means they are always beholden to someone else for one of the most fundamental human needs - shelter, a home.  It's a very effective means of oppression and forces people to work all their lives, historically until they dropped. 

Home ownership gives people a greater degree of independence, wealth, choice.  If you really wanted to have people "over a barrel" then preventing them from owning their own homes is a very effective way to do so . . .  as it was historically in more feudal times.

Home ownership does not occur until the mortgage is paid off, and often inhibits independence, this is especially so where we find people tied to mortgages for their entire working lives by 30 and 35 year mortgages.  Yes you may be able to hang whatever wall paper or put whatever coloured bathroom suite in that you desire, however, you are still tied to many years of payments before you "own" the property.  Until you pay off the final amount you are a slave to the terms and conditions that the financial institutions may wish to enforce such as interest rates and other whims of the market. 

We recognise that for IO mortgages why do feel the concept is any different for repayment mortgages? If you owe you don't own!

That's not legally correct.  The LR title defines the legal owner and that will be the mortgagor, not the lender.  A mortgage is simply a loan secured on your property, your legally-owned property.

But of course you're right that if you have a mortgage then you are a 'slave' to their repayment terms, in the same way that if you rent your home you're a 'slave' to your Landlord's terms.  The big difference, of course, is that a mortgage will eventually end, unlike renting.

It is easier to change landlord though than change mortgage, you are basically not going to be able to dictate terms to a mortgage lender whereas you can move to more favourable rental terms (price, location, landlord etc.) anytime you want? 

You're not going to be able to dictate terms to a landlord either.  And of course home owners can move to more favourable mortgage terms (price, location, lender etc) anytime they want (yes, you need to sell your house, but renters are usually tied in to a minimum 6-month tenancy anyway and I've managed to move home as an owner quicker than that before now).   It's not always frustration-free of course, but neither is moving between rented properties.  At the risk of being called sexist, I'd liken it to childbirth - it can be a painful process but the rewards are so great that many women choose to do it again.  And again.

I've moved home as an owner many times, and I'd guess that most home owners on here have done it as well. and each time to move was more favourable for a number of reasons.  In fact my last move as a home owner was so much more favourable that I was able to retire at 50 because I was able to release a whole load of equity by moving to a cheaper property.  Try doing that while renting.

Do you think the people stretching themselves into the bubble right now because they can`t afford the stamp duty and want to do their own wallpaper at any cost will retire at 50? Yor "six month" statement is surely a desperate argument though LOL, renters can move same day if they want, a homeowner/mortgage debtor has to wait for a buyer in most cases?

SpiderLegs

Crashy_Time said:

Do you think the people stretching themselves into the bubble right now because they can`t afford the stamp duty and want to do their own wallpaper at any cost will retire at 50? Yor "six month" statement is surely a desperate argument though LOL, renters can move same day if they want, a homeowner/mortgage debtor has to wait for a buyer in most cases?

There is no bubble.
get over it.

Mickey666

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

BikingBud said:

Mickey666 said:

 That doesn't make much sense to me.  A very effective way to "have us over a barrel" is to prevent us from being independently wealthy.  Restricting people to rented housing for their whole lives means they are always beholden to someone else for one of the most fundamental human needs - shelter, a home.  It's a very effective means of oppression and forces people to work all their lives, historically until they dropped. 

Home ownership gives people a greater degree of independence, wealth, choice.  If you really wanted to have people "over a barrel" then preventing them from owning their own homes is a very effective way to do so . . .  as it was historically in more feudal times.

Home ownership does not occur until the mortgage is paid off, and often inhibits independence, this is especially so where we find people tied to mortgages for their entire working lives by 30 and 35 year mortgages.  Yes you may be able to hang whatever wall paper or put whatever coloured bathroom suite in that you desire, however, you are still tied to many years of payments before you "own" the property.  Until you pay off the final amount you are a slave to the terms and conditions that the financial institutions may wish to enforce such as interest rates and other whims of the market. 

We recognise that for IO mortgages why do feel the concept is any different for repayment mortgages? If you owe you don't own!

That's not legally correct.  The LR title defines the legal owner and that will be the mortgagor, not the lender.  A mortgage is simply a loan secured on your property, your legally-owned property.

But of course you're right that if you have a mortgage then you are a 'slave' to their repayment terms, in the same way that if you rent your home you're a 'slave' to your Landlord's terms.  The big difference, of course, is that a mortgage will eventually end, unlike renting.

It is easier to change landlord though than change mortgage, you are basically not going to be able to dictate terms to a mortgage lender whereas you can move to more favourable rental terms (price, location, landlord etc.) anytime you want? 

You're not going to be able to dictate terms to a landlord either.  And of course home owners can move to more favourable mortgage terms (price, location, lender etc) anytime they want (yes, you need to sell your house, but renters are usually tied in to a minimum 6-month tenancy anyway and I've managed to move home as an owner quicker than that before now).   It's not always frustration-free of course, but neither is moving between rented properties.  At the risk of being called sexist, I'd liken it to childbirth - it can be a painful process but the rewards are so great that many women choose to do it again.  And again.

I've moved home as an owner many times, and I'd guess that most home owners on here have done it as well. and each time to move was more favourable for a number of reasons.  In fact my last move as a home owner was so much more favourable that I was able to retire at 50 because I was able to release a whole load of equity by moving to a cheaper property.  Try doing that while renting.

Do you think the people stretching themselves into the bubble right now because they can`t afford the stamp duty and want to do their own wallpaper at any cost will retire at 50? Yor "six month" statement is surely a desperate argument though LOL, renters can move same day if they want, a homeowner/mortgage debtor has to wait for a buyer in most cases?

It's possible - depends how old they are - but you've swerved my point as usual.  You can release equity as a home owner by moving to a cheaper property.  How much equity will you release if you move to a cheaper rental?

As for renters moving on the same day if they want, how does that work with their tenancy contract?