Quote:
Originally Posted by quasi
They don't own it forever, right now in this market the bank owns 28% of my house, I own the rest of it. That could of course change if the prices dropped a lot but with the amount of equity I have the market would have to drop by 300% to get me upside down which isn't happening. I should be mortgage free before my kids out of high school which isn't to terrible IMO, just in time for me to remortgage and pay for his University.  |
But that's not 100% true. If I buy a condo tomorrow, I put say $10,000 down. I pay into my mortgage for a few years, and the market crashes. I end up losing my job, and can't make my payments on the mortgage for the forseable future.
The bank can turn around and proceed with forclosure, forcing the property to be sold. Technically if the bank can do this than YOU DON'T OWN THE PROPERTY.
Technically I "own" my vehicle, I can modify it, I can throw a bowling ball through the window if I feel like it. But with $10,000 left in the financed loan, if I can't make a payment eventually, the bank can repo the vehicle, so technically I don't fully own this car do I. Yes I have equity in the car, but I don't own it entirely.
So yes eventually when you pay off the loan, you own the property, but for most people that is 20+ years in the future. At the end of the day more people need to realise that buying a property does not = security. There are a lot of people in the States right now who learned this lesson the hard way.