Do You Really Own That?

by Miranda Marquit · 26 comments


Not too long ago, I filled out a survey about my consumer habits. One of the questions, just before the demographic information, asked about my home. I was asked to choose between Rent and Own (and Other). As I checked the box next to Own, it occurred to me that I don’t actually own my home.

If I’m going to get really technical about it, the bank owns my home. I have a mortgage on my home, and since I bought my house with borrowed money, the bank actually has the first right to my home. If I stopped making my mortgage payments, the bank would be well within its rights to have me evicted. While it is true that I have some rights (the bank can’t just kick me out as long as I am making my mortgage payments), the reality is that I do not think that I actually “own” my home in the sense that it is truly mine. I will not truly own it, in my mind, until the mortgage is paid off and the bank no longer has the right to take it away from me.

Of course, this thought process has me thinking of other items that perhaps I do not really own. Our second car, bought about 18 months ago, is another purchase that we have to make payments on. We bought it with a loan, so I think the bank owns a pretty solid chunk of that car.

On the other hand, the first car my husband and I bought eight years ago as a married couple is something we own — it’s paid off. But if we were to get a title loan on the car, it would diminish our ownership. After all, we would have to give someone the right to take the car away from us if we did not pay back the loan. Ownership tends to shift about, I think, depending on whether or not someone else has the right to take it away from you. If you are securing debt with something you “own”, then you are, in fact, reducing your ownership in it.

Unsecured Debt

What about unsecured debt? Can you really be said to own something that you bought with money you do not really have? Or does the fact that the credit card company cannot exactly come and repossess the specific item mean that you really do own it?

It is an interesting conundrum. I submit, though, that carrying a great deal of unsecured debt does challenge your ownership of almost everything you have. If you default, creditors can sue you for what you owe — even if it is unsecured debt. Additionally, even bankruptcy does not always help. Stipulations in bankruptcy law mean that a judge can decide that you need to liquidate some of what you have in order to help pay back some portion of what you owe. These non-exempt assets can include non-essential furnishings that go beyond what most people need on a basic level in their homes, an expensive second car, or other unnecessary possessions that can be reasonably sold to help you reduce your debt.

In the end, debt represents a reduced ownership of the things that you have. Before you begin feeling good about what you own, stop and think: Do you really own that?

What are your feelings on ownership? Do you think debt diminishes your true ownership of what you have?

Money Saving Tip: An incredibly effective way to save more is to reduce your monthly Internet and TV costs. Click here for the current Verizon FiOS promotion codes and promos to see if you can save more money every month from now on.

Related Posts

{ 26 comments… read them below or add one }

vered September 7, 2010 at 6:43 am

I think it does. I only consider myself as the owner of an asset if I it’s fully paid for.

Reply

RWT January 13, 2011 at 11:19 am

You never actually own “your” house. You can own other property outright. You can own everything in your house outright. you cna own a vehicle out right but you can’t use it unless you pay taxes to be able to have the right to use it on the highway..but you NEVER own your house because you have to pay property taxes on it every year even if there is no notes being held by the bank against. the government owns yours and every other American’s home. If you don’t pay those taxes the government will take it to pay those taxes. How many times should a person have to pay taxes on the same piece of property? is the American Dream a lie… becuase you really never own that house, the government does. they can raise or lower those taxes. they can and have raised people property taxes and taken homes from people that have owned those homes for hundreds of years. The American Dream IS a lie.

Reply

KM September 7, 2010 at 6:57 am

Good point. I don’t think you actually own anything you still need to make payments on. They have a good term for it on cars: Lease to own. That’s exactly what you do when you make payments. If you pay it all off, you own it. If you defect halfway through, you might as well have been renting it as I don’t believe you get anything back from what you put into a repossessed item.

That’s why (well, and honestly many other reasons) I don’t like debt. I don’t have any credit cards and don’t owe anyone anything. Sure, sometimes I think I should apply for a card to build my credit history, but the thought of buying something with credit is really repulsive to me, even if I know I can definitely pay it off every month. I think the whole notion of having to borrow and pay back just so you can borrow larger amounts later is ridiculous and teaches people that it’s ok to live in debt and feeds the credit card companies. I currently have a car and condo paid off, so I don’t worry too much about the lack of credit history since I will not need any major purchases anytime soon. In the meantime, I can save instead and be able to buy things outright without any interest and completely own them.

Reply

Zarina September 7, 2010 at 8:36 am

What’s so strange about this is educational debt.
Do I not own the knowledge I acquired in grad school yet? Maybe thats the one exception.

Reply

WebHosting Guru September 7, 2010 at 8:49 am

You had me thinking on that one. Banks naturally will evict us if we default on our mortgage payments but they will exert extra effort to make you pay for your mortgage as they consider you as the owner. They don’t want another default payment on a house as this reflects on their credibility.

Reply

Miranda Marquit September 7, 2010 at 8:52 am

That’s an interesting thought, Zarina. Someone might be able to go after your assets if you default on a student loan (especially if it’s private), but they can’t take away what you’ve learned.

Reply

John July 23, 2011 at 7:30 pm

Yet. Wait ’till the government finds a way to repossess our brains. They’d do it in a heartbeat.

Reply

Jenna September 7, 2010 at 10:38 am

I’m not sure if I agree with you on this one. While the bank owns part of your home and car, you are still responsible for both. And being responsible I believe shows good ownership.

Reply

Greg McFarlane September 7, 2010 at 9:20 pm

Excellent point. I remember graduating college and hearing some of my classmates immediately brag “We bought a house.” No, you bought 3% of a house. The bank bought a house.

But it’s important to remember that financing isn’t a one-way street, and that you don’t have to spend your life in a constant state of indebtedness. Taking your own equity and investing it elsewhere, i.e. leveraging your money, is really the only lasting way to get rich.

Reply

Meoip September 9, 2010 at 7:35 am

Interesting thought but if your argument is you don’t own something until it cannot be taken away or their are no lien holders then you could argue that you never actually own your home since the government can seize it for failure to pay taxes.

Reply

Mike @ Tech and Biz Gadgets September 14, 2010 at 8:47 am

Miranda,

You are so right, many people think they are home owners but in reality Bank is real owner, until the debt are paid off. With average loan being 30 years, many of us will be not owner of home till ages, specially if they keep refinancing it.

Reply

Aleks September 15, 2010 at 3:47 am

If you think like that, then in the end we don’t own anything. What happens if I don’t pay a fine? Someone might come by and confiscate my car, although it’s paid off. Or if I allow my debt to get too high without paying it back, the bailiff might take away my television, although it was paid for in cash. And what happens if I have millions of Dollars sitting on a savings account, and the bank goes bankrupt. Do I get it back? Probably not all of it…

But this is the kind of system we have. Everyone wants some form of security, one way or ther other… the pitty thing is that the one person who is always in a disadvantage is the individual person.

Reply

debt managemenmt uk September 15, 2010 at 11:09 pm

Reduce your debt.
This is a post which is concentrating on the above point and also covering the mortgage and unsecured debt issue.thanks for this nice post.

Reply

Jim Cady September 16, 2010 at 7:04 am

Do you EVER really own a house? My taxes are about 2.75% of it’s realizable value, so in effect I have to pay the entire value of my home to the government every 36 years or they’ll take it away and sell it to someone else who WILL make the payments. And, even if I do make the payments, but they decide that they really want to do something else with my land, they can just take it away and give it to someone else (say, a land developer). It’s called Eminent Domain. Doesn’t sound like ownership to me. It sounds more like the government leases my house to me.

Reply

Miranda September 16, 2010 at 9:38 am

You make a good point, Jim. With the ability of just about anyone to take your home away, its ownership does seem rather dubious, even after you pay off the mortgage and have the title.

Reply

Nick Sweeney (CoupSmart) October 15, 2010 at 9:06 am

Awesome post, Miranda.

Whenever people ask me if I own my home, I tell them, “No, the bank does. I’m just paying them back over the course of 20 years.”

A mortgage is just a fancy word for “debt.” This is something I wish was pointed out during the “Ownership Society” years. I think the term “home OWERship” needs to enter the lexicon.

Living in a home is fantastic, don’t get me wrong. But unless you have the deed and are only paying property taxes, you’re still “renting.” Only your landlord is Fannie Mae or your bank.

Reply

Paul October 20, 2010 at 2:33 pm

Owning just means the privilege of paying the government every year, or else they take it. Because they can.

No one owns, we just rent.

Reply

RWT January 13, 2011 at 11:23 am

that is right, the Americna Dream is hype, propaganda, or to put it simply…it’s a LIE.

Reply

Eric October 15, 2012 at 12:54 pm

Ah, self loathing…. ain’t it angsty cute.

Hell, if there were no government, you could argue you don’t own something because a roaving gang might take it from you. In the absenence of other people you could argue that you don’t own anything because you will die eventually.

You can get all philosophical about it, but when you buy a house with a mortgage, you have all the benefits of ownership. You just also have a loan with the house as security. If you can’t understand that, then i’m really sorry for you.

Reply

Jay & Jasmine Rose November 11, 2010 at 4:48 pm

Excellent post Miranda. My wife and I were just discussing this very topic two nights ago. We had a mini-debate with a friend of ours, and let’s just say that it ended in a stalemate of “finance vs. feelings”, lol.

Your clear explanations and logic have us chuckling to ourselves.

Reply

Eric October 15, 2012 at 12:58 pm

Then you and your wife were the ones with the “feelings” and your friends have the “finance” end. If you own a house, you own a house… mortgage has nothing to do with it. The bank has ZERO claim to your house. they cannot drop by to use the bathroom, they can’t come inside to dig around in the fridge. You own it and can do anything you like with the house including selling it. In fact, you own it so much that you can use it as collateral on a mortgage. This whole “you don’t own something you owe money on” is completely incorrect.

Now, me, I avoid debt. I paid off my first house in five years and my second house will be paid off in under ten. But in either case, I own the house and have full ownership rights.

Reply

Ninz November 27, 2010 at 9:59 am

You are all wrong…. The fact is, that you do not even own your home even after you pay off the mortgage. Your mortgage is subject to a “grant from the Crown”. Which means that the “Crown” owns the property and gives you certain rights to the property (like living there), as long as you comply with the rules and legislations that you agreed to follow when you signed on the dotted line. When you finish paying off the mortgage what they give you is document entitled “discharge of mortgage”. You do not receive the title to the land or buildings. The only way to own property is to have allodial title to the property. The only one to have allodial title to all property is the Crown, which is a corporation owned by the queen of England. Why do you think they call it ” Crown Land” duh….

I followed the paperwork regarding the mortgage that I gave (that’s right, you do not take a mortgage you give it. It is a security. The loan that you take with the bank is seperate. I am talking about the Mortgage document that the lawyer fills out and send to the local property registry) and when it got registered at the property registry, they archived the original and made two microfilm copies. One is kept at the registry and can be viewed for a fee. The other microfilm copy is kept at an off site location, which they won’t tell me where. The original is kept in archives and cannot be viewed. Follow the paperwork on your mortgage. Dig deep. All you will find is dead ends. What does it all mean? It means that we are still living under the same system of serfdom of the 15th century. The crown owns everything and we are merely their serf (slaves). You can deny as you will, but if you read the rules and legislations and definitions in this language called Legalese. You will understand that it has been written to deceive. Maybe it’s time we all woke up from our lazy slumber, because we don’t have much time before all of this becomes very well evident.

Reply

Avicorb September 10, 2011 at 9:14 pm

Even though I have gotten a few other loans on my mortgage in the past I always make sure that the balance on my loan is lower than my severance so that if I ever lose my job I am sure that my severance will be able to pay off my mortgage and as long as I am in that position I believe I can say I own my house even though I have a mortgage.

Reply

Gilda February 7, 2012 at 5:29 pm

Reading this article and the comments has been enlightening. It’s so true, yet I never realized it before. There is no question about it – home ownership is a delusion that has been sold as the American Dream. If it can be taken away from you you don’t own it. The truth is we don’t own anything – not even our privacy or freedom.

You know what? I think it’s better not to dwell on these things too much, but it is definitely better to be as debt free as possible.

Reply

cathy May 26, 2012 at 8:37 am

You don’t own your home OR your car. Try not paying the property taxes and see who owns your ‘paid off home!’

And whoever you register your car to owns your car. They just loan it to you.

What do you think gives them the right to ticket and tow ‘your’ car?

Yup you contracted your ownership away when you licensed and registered it!

Reply

Eric October 15, 2012 at 12:51 pm

This article is completely incorrect. There is no doubt that you own your house. if the bank owns your house, can the VP come over for a dip in the hot tub? Can the employees have a BBQ in the back yard.

Your bank does not own your house, you do. You use it as security against a mortgage. Under certain circumstances (default) the bank can claim accelerated payment on the principle amount. If you cannot pay that, then they can begin the foreclosure process. this is not even remotely the same as you not owning something.

Does this mean you shouldn’t pay off your house? Of course not. But I own my current house just as much as I owned the one I had paid off. The premise of this article is silly and rather embarrassing for a money advice website.

Reply

Leave a Comment