Very silly take. If the property value changes, the loan doesn't. You're responsible for maintenance. I don't see how it's relevant that you have a loan against it.
If you own your home outright, and then take out a HELOC, do you no longer own your home?
Depends on your definition of "own" I suppose. If you have a mortgage, the bank has a mortgage lien on the home, which gives them a legal right to take it from you if you don't pay. I.e. you will get kicked to the curb on an underwater mortgage if you can't make the payments any longer, but also can't afford to bridge the gap in order to sell.
> If you have a mortgage, the bank has a mortgage lien on the home, which gives them a legal right to take it from you if you don't pay. I.e. you will get kicked to the curb on an underwater mortgage if you can't make the payments any longer, but also can't afford to bridge the gap in order to sell.
In a non-recourse state (or, to a lesser extent, even in a recourse state) foreclosure on an underwater mortgage loans isn't a great deal for the bank; it either eliminates any chance on recovering part of the mortgage (non-recourse), or turns the amount above what can be realized in a foreclosure sale into a non-secured debt (recourse). Depending on circumstances, there's a chance they'll just choose not to do that for a very long time (much longer than would be the case either with an "above water" mortgage that wasn't being paid, or than a landlord would float a tenant that wasn't paying.) They also have a pretty big incentive to approve a short sale on an underwater mortgage, since you'll probably get a better price than a foreclosure sale and cost them less money than foreclosing and trying to sell.
(Have I been underwater, gone an extended period of time withput paying a mortgage both while living in the home and then after moving out, getting a buyer, and proposing and waiting for approval for a short sale, in a non-recourse state? Yes, yes I have.)
If the government exists to protect property rights through use of force, and property owners have access to that system without paying taxes, what do you call the rest of us, who have to pay rents to those property owners and taxes for the government? Not serfs?
Even feudal lords had to protect their own land and were also expected to protect their serfs, lest their serfs' foods be given to raiders rather than their lord.
By that view you never own land since you’re always on the hook for property tax, which is a kind of rent.
I suppose there are rare cases of allodial title. Nevada used to let you buy an allodial title that couldn't be inherited. It was useful for doing things like getting a second mortgage from a bank that wasn't aware of the law and then immediately defaulting and telling them to get bent because they can't legally foreclose on an allod. Needless to say lobbyists successfully put a stop to that.
> By that view you never own land since you’re always on the hook for property tax, which is a kind of rent.
Bad comparison. That both failing to pay off a loan or pay property taxes can lead to foreclosure is a superficial similarity. Property tax isn't paying off a debt you owe a bank for a loan used to buy the house. It's merely a tax collected to cover municipal expenses that's calculated based on the value of your house.
Now as to whether the bank owns the house you bought using a loan, morally there is a certain practical truthfulness to that statement, perhaps, and for practical purposes is may be somewhat pedantic making distinction that determine "true" ownership. But strictly speaking, as with borrowing in general, if a loan is money you've borrowed that you then use to buy an asset like a house, then what you owe the lender isn't the house, but the value of the loan. If I lend you $20, and you buy a book with that money, you don't owe me the book, you owe me $20.
I feel like its a useful metric for lots of issues - especially public policy issues. Even if the bank "owns" the home you get the tax breaks for it and behave like someone who has a self-interest of increasing the value of it.
youre getting stuck in semantics. if you own a house in the US you still pay property tax and are subject to the rules and regulations around it anyway. the point of these stats is to know who is a renter and who has property they own.
You seem to be using a definition of "own" that differs from the one everyone else is using.
The bank can't gain or lose money when your home changes in value. It can't enter your home without your permission, change the paint color, or sell your home.
It can do these things if you become unable to pay for your mortgage. Your home is security for them, but you could buy a house with a loan secured by anything else. It's not uncommon for wealthy people to borrow against their stocks and then buy a home "in cash". In that situation, you'd never say "the bank owns their home" just because they owe the bank a bunch of money.
OP's original point still stands. Real estate in America is designed to have many economic advantages for wealth accumulation and preservation. You might even go as far as saying the economic advantages of real estate are a byproduct of regulatory capture
people lose their homes all the time because the neighborhood gets gentrified and their home values go up and they can't afford the property tax.
insurance can skyrocket based on natural disasters in your region. a lot of the Gulf Coast has trouble getting homeowners insurance. if earthquakes ever pick up on the west coast. the same thing will happen
You don't own the land your home sits on. The government can take it any time they want and do whatever they want with your property; you don't really own your home even if you own it.
I mean - at some point you get into a philosophical debate about, "What, really, is ownership?". Listen if you have a mortgage, you own the house by any common definition of the term.
Does one really ever own anything, if someone can just take it from them free and clear?
As I say, there's more than one philosophical perspective on this. I am not a philosopher, but here's my take on a few perspectives:
- Pragmatist: If the law says your average person can't roll in and take it, you own it.
- Libertarian: If the law says your average person can't roll in and take it, but corporations or HOA's or other entities tell you what you can and can't do with it, you don't own it.
- Tribalist: If there's no law, and you can slaughter anyone who tries to take it, you own it.
- Feudalist: If the law protects it, but the wealthy and powerful can just roll in and take it because they make the law, you own it. Until at least it becomes of value, then you can rent it back from its gracious new owners.
- Communalist: You don't own it, the community owns it, but they're happy to allocate it for your usage as long as you play by their rules.
- Common language: If you have a mortgage on it, you own it in the eyes of the law. If you stop paying the mortgage, or go into tax arrears, or at the victim of eminent domain, people can make it not-yours, but you still own it (for now).
- Expansionist: If you were there first, you own it. Unless your culture has no concept of ownership, in which case, you don't own it, but someone else soon will.
> It's not uncommon for wealthy people to borrow against their stocks and then buy a home "in cash". In that situation, you'd never say "the bank owns their home" just because they owe the bank a bunch of money.
The difference lies in whether or not they can take your house away.
If you have a mortgage you're just renting until you pay in full. You don't own it until you fully pay.
If take a loan, and buy a house with the money, they can't take away the house. Sure, you could say that you might be forced to sell your house to pay back the loan, but that would mean nobody owns anything if he has to sell something in a pinch.
To me, it's not enough for someone to simply "identify" as an owner.
To me the definition of ownership means someone cant come take your property if you don't do what they say.
what's even more fascinating is that even after you pay off that mortgage, your land is still able to be taken from you forcefully if you don't pay your property taxes or the government sites you for code violation.
you just traded masters from the bank to the government.
homes are one of the biggest scams of modern times in my opinion.
Spot the renter in SF/Seattle/LA/NYC mad about wording around people "owning" a house. Yes I have a mortgage, but at least my monthly payments are 98.01% going to my own future.
Renting doesn't even compare, just throwing money at someone else's retirement.
If you own a home and have a mortgage, there is a lien on your property.
There are many ways a lien could be granted on property you own; taking a mortgage, loss of a civil suit, unpaid property taxes are a few common ways.
It is fine to say you don't own anything with liens on it "free and clear". The lien places limits on your ability to do certain things, mostly (quite reasonably) changing ownership.
But ownership is about control, and no one ever has complete control over any physical property, so owning with a mortgage is certainly well within the sphere of what most people think of ownership as.
No one ever has absolute control. Control is a continuum.
Ownership is a well defined concept in US society. That it doesn’t map to the absolute terminal point on the control continuum does not mean the common legal and vernacular definitions of ownership are broken.
Anecdata. For the price of a big 4 - 3 bedroom house in an mid income zip code in a moderate to low cost of living city in the US, I could buy a smallish 2-3 bedroom apartment in my country's capital city, in a similarly nice area.
And my starting salary in the US was 3 times what I made over there. And the interest rates are at least double from what we get here.
Something that would require effort and discipline in a dual income household over there is totally with reach over here (in the Midwest).
For others, with less market valued skills, owning a house in our countries of origin is even more out of reach, even aspirational.
Another thing to consider is that for many hispanics, who may have witnessed first hand the effects of inflation, owning property, heck, assets in general, is a way safer that saving on a currency that may be worthless in the future.
> For the price of a big 4 - 3 bedroom house in an mid income zip code in a moderate to low cost of living city in the US, I could buy a smallish 2-3 bedroom apartment in my country's capital city, in a similarly nice area.
I think this has to do with the high costs of capital cities, rather than comparisons across countries. European capitals for example, especially dense ones, have typically been very expensive - see London, Paris, and recently Berlin; the spread with other major cities in the same country is in the range 2/2.5x, or even more.
I know it is technically correct, but I always expect headlines that talk about "majority" in this way to be a much larger majority. "Over half" would convey this percent way more effectively.
At face value, that the percent is going up feels like a good thing. There a reason that is not the case?
65 comments
[ 3.0 ms ] story [ 118 ms ] threadyou don't own it. the bank owns it and you're a caretaker of it for 30 years
If you own your home outright, and then take out a HELOC, do you no longer own your home?
That works both ways. Google "underwater mortgage"
In a non-recourse state (or, to a lesser extent, even in a recourse state) foreclosure on an underwater mortgage loans isn't a great deal for the bank; it either eliminates any chance on recovering part of the mortgage (non-recourse), or turns the amount above what can be realized in a foreclosure sale into a non-secured debt (recourse). Depending on circumstances, there's a chance they'll just choose not to do that for a very long time (much longer than would be the case either with an "above water" mortgage that wasn't being paid, or than a landlord would float a tenant that wasn't paying.) They also have a pretty big incentive to approve a short sale on an underwater mortgage, since you'll probably get a better price than a foreclosure sale and cost them less money than foreclosing and trying to sell.
(Have I been underwater, gone an extended period of time withput paying a mortgage both while living in the home and then after moving out, getting a buyer, and proposing and waiting for approval for a short sale, in a non-recourse state? Yes, yes I have.)
what matters is that someone can take away your property if you don't do what they say. That's not ownership.
People lose their house often to runaway property taxes.
This should anger people more.
If purchasing a piece of land means that it stays within your family forever with no additional payments or taxes, that's feudalism.
feudalism is NOT owning your land because the government owns it and you pay them for the use of the land which is exactly what we have now.
Even feudal lords had to protect their own land and were also expected to protect their serfs, lest their serfs' foods be given to raiders rather than their lord.
Of course how valuable this is depends on how long you live and a number of other factors.
I suppose there are rare cases of allodial title. Nevada used to let you buy an allodial title that couldn't be inherited. It was useful for doing things like getting a second mortgage from a bank that wasn't aware of the law and then immediately defaulting and telling them to get bent because they can't legally foreclose on an allod. Needless to say lobbyists successfully put a stop to that.
If you don't pay your taxes you go to prison, they don't take your house away.
Bad comparison. That both failing to pay off a loan or pay property taxes can lead to foreclosure is a superficial similarity. Property tax isn't paying off a debt you owe a bank for a loan used to buy the house. It's merely a tax collected to cover municipal expenses that's calculated based on the value of your house.
Now as to whether the bank owns the house you bought using a loan, morally there is a certain practical truthfulness to that statement, perhaps, and for practical purposes is may be somewhat pedantic making distinction that determine "true" ownership. But strictly speaking, as with borrowing in general, if a loan is money you've borrowed that you then use to buy an asset like a house, then what you owe the lender isn't the house, but the value of the loan. If I lend you $20, and you buy a book with that money, you don't owe me the book, you owe me $20.
That the state putatively spends that money on common goods has no bearing on the landlord relationship.
people.seem.to want to identify as an owner as it makes them feel good.
After you pay off the bank you STILL don't own the property thanks to the government who can take it away.
a homeowner is merely a serf for the government property taxes.
The bank can't gain or lose money when your home changes in value. It can't enter your home without your permission, change the paint color, or sell your home.
It can do these things if you become unable to pay for your mortgage. Your home is security for them, but you could buy a house with a loan secured by anything else. It's not uncommon for wealthy people to borrow against their stocks and then buy a home "in cash". In that situation, you'd never say "the bank owns their home" just because they owe the bank a bunch of money.
Your property tax & insurance (usually less than 1/4th of your payment) goes up 2-3% (in most places).
Heh, or in my case: 30% this year.
https://smartasset.com/taxes/what-is-a-homestead-tax-exempti...
OP's original point still stands. Real estate in America is designed to have many economic advantages for wealth accumulation and preservation. You might even go as far as saying the economic advantages of real estate are a byproduct of regulatory capture
This seems correct to me. I don't think it's been specifically designed to be a store of wealth.
the property value that can skyrocket
There's people that own $8M dollar houses in Hollywood paying less property tax than people living in $800k condos.
people lose their homes all the time because the neighborhood gets gentrified and their home values go up and they can't afford the property tax.
insurance can skyrocket based on natural disasters in your region. a lot of the Gulf Coast has trouble getting homeowners insurance. if earthquakes ever pick up on the west coast. the same thing will happen
You don't own the land your home sits on. The government can take it any time they want and do whatever they want with your property; you don't really own your home even if you own it.
I mean - at some point you get into a philosophical debate about, "What, really, is ownership?". Listen if you have a mortgage, you own the house by any common definition of the term.
does one truly ever own their home?
or does one always have someone who tells them what to do via zoning or property tax or mortgage?
Does one really ever own anything, if someone can just take it from them free and clear?
As I say, there's more than one philosophical perspective on this. I am not a philosopher, but here's my take on a few perspectives:
- Pragmatist: If the law says your average person can't roll in and take it, you own it.
- Libertarian: If the law says your average person can't roll in and take it, but corporations or HOA's or other entities tell you what you can and can't do with it, you don't own it.
- Tribalist: If there's no law, and you can slaughter anyone who tries to take it, you own it.
- Feudalist: If the law protects it, but the wealthy and powerful can just roll in and take it because they make the law, you own it. Until at least it becomes of value, then you can rent it back from its gracious new owners.
- Communalist: You don't own it, the community owns it, but they're happy to allocate it for your usage as long as you play by their rules.
- Common language: If you have a mortgage on it, you own it in the eyes of the law. If you stop paying the mortgage, or go into tax arrears, or at the victim of eminent domain, people can make it not-yours, but you still own it (for now).
- Expansionist: If you were there first, you own it. Unless your culture has no concept of ownership, in which case, you don't own it, but someone else soon will.
think for yourself for a minute
get down to the extreme basics.
ownership means someone can't take your property.
The only way to take someone's property unwillingly is with force/theft
The government is supposed to protect you from this by being the only sanctioned use of force in the country.
however, it does the opposite and takes your property by force itself.
The difference lies in whether or not they can take your house away.
If you have a mortgage you're just renting until you pay in full. You don't own it until you fully pay.
If take a loan, and buy a house with the money, they can't take away the house. Sure, you could say that you might be forced to sell your house to pay back the loan, but that would mean nobody owns anything if he has to sell something in a pinch.
any debt you get in puts all of your assets at risk
To me the definition of ownership means someone cant come take your property if you don't do what they say.
what's even more fascinating is that even after you pay off that mortgage, your land is still able to be taken from you forcefully if you don't pay your property taxes or the government sites you for code violation.
you just traded masters from the bank to the government.
homes are one of the biggest scams of modern times in my opinion.
Renting doesn't even compare, just throwing money at someone else's retirement.
Being a home owner is a great thing, but that something very few people can achieve today at an age when they can still get a hard-on.
then you have property tax, insurance, maintenance, and a huge amount in interest.
My aunt is a landlord. And at the end of the day, her profit is around 20%.
which means you are only paying 20% less than a renter, however, you're completely locked in and can't go anywhere.
and even more unfortunate... even after your mortgage is paid off ....you'll still be paying: property tax, maintenance, insurance etc etc. forever
and none of that is getting any cheaper.
people lose their houses all the time because property taxes got away from them because rich people moved in and just took the neighborhood.
There are many ways a lien could be granted on property you own; taking a mortgage, loss of a civil suit, unpaid property taxes are a few common ways.
It is fine to say you don't own anything with liens on it "free and clear". The lien places limits on your ability to do certain things, mostly (quite reasonably) changing ownership.
But ownership is about control, and no one ever has complete control over any physical property, so owning with a mortgage is certainly well within the sphere of what most people think of ownership as.
them in the last paragraph you say that one doed control property?
thesis does not seem cohesive to me
Ownership is a well defined concept in US society. That it doesn’t map to the absolute terminal point on the control continuum does not mean the common legal and vernacular definitions of ownership are broken.
I keep hearing and reading opposite takes on this.
It's easy to see why it doesn't hold for the majority of renters.
And my starting salary in the US was 3 times what I made over there. And the interest rates are at least double from what we get here.
Something that would require effort and discipline in a dual income household over there is totally with reach over here (in the Midwest).
For others, with less market valued skills, owning a house in our countries of origin is even more out of reach, even aspirational.
Another thing to consider is that for many hispanics, who may have witnessed first hand the effects of inflation, owning property, heck, assets in general, is a way safer that saving on a currency that may be worthless in the future.
I think this has to do with the high costs of capital cities, rather than comparisons across countries. European capitals for example, especially dense ones, have typically been very expensive - see London, Paris, and recently Berlin; the spread with other major cities in the same country is in the range 2/2.5x, or even more.
At face value, that the percent is going up feels like a good thing. There a reason that is not the case?