You’re finally happy that you now have a place to call your own! But wait, do you really own your home if you have a mortgage hanging over your head? This question isn't as tricky as it seems. Let me explain in a moment.
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Mortgages utilize your property as loan collateral.
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Mortgage applications rises by 9.7%.
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Lower rates lead to 11% more refinance applications.
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You can own property individually, jointly, in a trust, or in a partnership.
Quick Insights :
How Does Mortgage Home Ownership Work?
Well, you do own your home because your name is legally written on your deed and the title of the house. Since your home is used as collateral, your mortgage lender has a lien on your home.
A 'lien' is a legal claim that grants your lender the right to retain possession of your property until the debt is fully paid off.
Here’s how a mortgage works in real-time -
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➙ When you get a traditional mortgage or a combined one like package mortgage loan to buy a house, you're borrowing money from a lender. You agree to pay back the loan over time.
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➙ While you're paying your monthly mortgage, you have rights to the property. You can live in it, renovate it, or paint the walls any color you like.
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➙ But remember, the lender also has a stake in the property. If you don’t repay the loan, they can take your house.
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Clarifying Ownership Rights
To understand your home ownership rights, let me explain property rights. They're what you can legally do with your property, safeguarded by the Fifth Amendment.
Here are the set of rights you have -
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Possession
You have the right to own and live in your house, but keep up with mortgage payments if you have one.
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Control
You decide what to do with your property, following local rules.
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Exclusion
You choose who can enter your property, though there are exceptions.
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Enjoyment
You can use your property as you like, within legal limits.
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Disposition
You can sell, gift, or pass on your property, but if you have a mortgage, you may need to pay it off first when selling.
Final Thoughts
So, do you still own your home if you have a mortgage? The short answer is yes. While the lender does have a financial interest in the property until you’ve paid off the loan, you still have homeownership rights.
So, go ahead, make those mortgage payments, spruce up your space, and enjoy the pride of homeownership.
About the writer
Stephanie Trudeau
Reverse Mortgage Expert