When you take a mortgage, that is a secured loan, meaning the bank owns the house until you’ve paid it off. Additionally, if you don’t put 20% down, the bank requires you to carry mortgage insurance. Listen to landlords tell it, and tenants can basically stay in a house for months or a year without paying rent, all the while damaging the house. I don’t really understand why a mortgage with a lower monthly payment is harder to qualify for than rent would be.
Being a secured loan doesn’t mean the bank owns the house. You own the house, the house is collateral. There maybe terms on the loan, like requiring insurance, but still, your name is on the deed. Only you can decide to paint it or redo the bathroom, etc. the bank can take possession if you fail to pay, but until that point it is yours.
Tomato/tomato. The bank paid almost all of the money to the seller. If you stop paying the mortgage, the bank will take legal possession of the house and sell it to recoup its money. You may be able to paint it, but the bank owns it in the most important sense of the word.
I can’t disagree more with your last sentence. Seems more of an emotional framing than anything. I can’t think of a single way that the bank shows ownership over my home over myself.
Are you just upset you can’t stop paying for the house and keep it?
I’m not upset about anything. I just don’t see how something is “yours” if you’re still paying for it. Like, I guess it’s partly yours, but it’s mostly the bank’s for a long time.
Well see, I made a deal with a bank, that said I would like to borrow, say 100k, and I would be willing to pay it back over 30 years plus extra, or else the bank would have no incentive to do it.
Separately, they said they would be far more comfortable loaning me money, if I could guarantee that if things went south, there was some sort of asset they could take besides my money.
It didnt have to be my house, it could have been something else THAT I OWNED. Thats the important part. The house is only collateral because I own it, despite the outstanding mortgage payment.
Edit to add: this is also why I would keep the profits from selling my house, and would only have to pay off the loan.
Yes, I understand what collateral is. It’s something the bank owns, but allows you to use until you’ve paid it off. For example, the bank keeps the title to my car until I’ve paid it off, and then they send me the title.
When you take a mortgage, that is a secured loan, meaning the bank owns the house until you’ve paid it off. Additionally, if you don’t put 20% down, the bank requires you to carry mortgage insurance. Listen to landlords tell it, and tenants can basically stay in a house for months or a year without paying rent, all the while damaging the house. I don’t really understand why a mortgage with a lower monthly payment is harder to qualify for than rent would be.
Being a secured loan doesn’t mean the bank owns the house. You own the house, the house is collateral. There maybe terms on the loan, like requiring insurance, but still, your name is on the deed. Only you can decide to paint it or redo the bathroom, etc. the bank can take possession if you fail to pay, but until that point it is yours.
Tomato/tomato. The bank paid almost all of the money to the seller. If you stop paying the mortgage, the bank will take legal possession of the house and sell it to recoup its money. You may be able to paint it, but the bank owns it in the most important sense of the word.
I can’t disagree more with your last sentence. Seems more of an emotional framing than anything. I can’t think of a single way that the bank shows ownership over my home over myself.
Are you just upset you can’t stop paying for the house and keep it?
I’m not upset about anything. I just don’t see how something is “yours” if you’re still paying for it. Like, I guess it’s partly yours, but it’s mostly the bank’s for a long time.
Well see, I made a deal with a bank, that said I would like to borrow, say 100k, and I would be willing to pay it back over 30 years plus extra, or else the bank would have no incentive to do it.
Separately, they said they would be far more comfortable loaning me money, if I could guarantee that if things went south, there was some sort of asset they could take besides my money.
It didnt have to be my house, it could have been something else THAT I OWNED. Thats the important part. The house is only collateral because I own it, despite the outstanding mortgage payment.
Edit to add: this is also why I would keep the profits from selling my house, and would only have to pay off the loan.
Yes, I understand what collateral is. It’s something the bank owns, but allows you to use until you’ve paid it off. For example, the bank keeps the title to my car until I’ve paid it off, and then they send me the title.
You know what, the way you said it this time just really clicked. I now also hate banks. Good talk.
Correct and great point. In fact, most loans, such as VA and FHA are daddy sam backed up. So you have make a good point where is the risk for these?