mortgage

Status
Not open for further replies.

stephenlearner

Senior Member
Chinese
Hi,

We bought a house on mortgage. Does it mean that the bank will take away the house if we can't repay the loan? Will they sell the house and get the loan back from the sale and give the remaining part to us?

Thanks a lot.
 
  • Proudy

    Senior Member
    USA, English
    1. A loan for the purchase of real property, secured by a lien on the property.
    "Secured by a lien" means the lending organization has the title to the property until the terms are satisfied (usually paid in full).

    For more information:
    mortgage
     

    Egmont

    Senior Member
    English - U.S.
    The time to ask this question was probably before buying the house, not after ... but, in the U.S., that is probably what will happen. Before that happens you will have some time, probably at least a few months, in which to work things out. Details vary a great deal from one part of the U.S. to another, because much of this is controlled by state and local laws. If you are seriously concerned about being in this situation, consult with a real estate lawyer NOW. Many things that can be arranged before a problem arises become much more difficult once you miss a few payments.
     

    Packard

    Senior Member
    USA, English
    The short answer is that the bank can foreclose on a home if the mortgage is not repaid.

    Banks use the home as collateral to ensure repayment either by the buyer making regular payments or by taking ownership of the home and selling it for the money owed.

    Depending upon the market conditions banks can be eager to foreclose on a home and resell it or they can be very reluctant to do the same. In some market conditions the repossessed home may be difficult to re-sell by the bank for amounts equal to the amount owed.

    There is such a home in my neighborhood that has been empty for the entire 22 years that I have lived in the area. There may be a legal dispute over ownership. In any case that home is a "zombie home", and would be very difficult to sell at this time.
     

    Packard

    Senior Member
    USA, English
    The time to ask this question was probably before buying the house, not after ... but, in the U.S., that is probably what will happen. Before that happens you will have some time, probably at least a few months, in which to work things out. Details vary a great deal from one part of the U.S. to another, because much of this is controlled by state and local laws. If you are seriously concerned about being in this situation, consult with a real estate lawyer NOW. Many things that can be arranged before a problem arises become much more difficult once you miss a few payments.
    My neighbor across the street could not make the payments once he was divorced. The house was worth less than the mortgage so he could not sell it. Instead he simply stopped making mortgage payments and lived in the house for free until he was evicted three years later. The bank took possession and sold it as a foreclosure. No doubt that they lost money on the deal.

    By living in the house for free those three years he saved about $64,000.00. Not bad.
     

    Andygc

    Senior Member
    British English
    We bought a house on mortgage. Does it mean that the bank will take away the house if we can't repay the loan?
    Yes, they can and usually will. A mortgage is a loan for the purchase of property which is secured against that property. It usually refers to house purchase but does not have to. The legal position will vary from country to country. Whether the mortgager receives any money from the sale of the property would depend on the terms of the contract, the sale value of the property and the costs incurred in foreclosing and selling.
     

    Packard

    Senior Member
    USA, English
    Note: I am uncertain about the preposition "on" with mortgage. I think "with" works better.
     

    Edinburgher

    Senior Member
    German/English bilingual
    By living in the house for free those three years he saved about $64,000.00. Not bad.
    Not bad? :confused:
    But surely he would still owe the bank any money that they lost on the deal.
    To take some example figures: Say he bought the house for $800k, using $200k cash and a $600k loan.
    Suppose that at the time of stopping the payments, $100k had been paid off, so the amount owed was down to $500k.
    Some of the $64k in "saved" payments would have, if he had he made them, reduced the debt even further, but the interest element (say £50k) would simply have been added to the debt, raising it to $550k.
    By the time the bank sold the house, they could only get $400k for it. Now who lost what? The bank didn't really lose the $150k shortfall; he still owes them this, unless he filed for bankruptcy. He also lost his initial $200k and has nowhere to live, and a blemished credit record. That seems to me to be a pretty unenviable position to be in.
    Note: I am uncertain about the preposition "on" with mortgage. I think "with" works better.
    Yes, probably, but I can accept "on mortgage" as a variant of "on tick" or "on credit".
     

    Packard

    Senior Member
    USA, English
    Not bad? :confused:
    But surely he would still owe the bank any money that they lost on the deal.
    To take some example figures: Say he bought the house for $800k, using $200k cash and a $600k loan.
    Suppose that at the time of stopping the payments, $100k had been paid off, so the amount owed was down to $500k.
    Some of the $64k in "saved" payments would have, if he had he made them, reduced the debt even further, but the interest element (say £50k) would simply have been added to the debt, raising it to $550k.
    By the time the bank sold the house, they could only get $400k for it. Now who lost what? The bank didn't really lose the $150k shortfall; he still owes them this, unless he filed for bankruptcy. He also lost his initial $200k and has nowhere to live, and a blemished credit record. That seems to me to be a pretty unenviable position to be in.

    Yes, probably, but I can accept "on mortgage" as a variant of "on tick" or "on credit".
    My error by omission.

    He filed for bankruptcy.

    It took a full year for the bank to get him to vacate the premises. I estimated that his payments were 1,800 to 2,400 per month. The $64,000.00 in savings was for the lower figure. Obviously if the house was "under water" (i.e. he owed more than the house was worth), it still meant that he lost money on the deal. But saving $64,000.00 to $86,400.00 is a significant amount of money. If he moved out when the bank politely asked, he would have been out that much money.
     

    DonnyB

    Sixties Mod
    English UK Southern Standard English
    We are, unfortunately, straying into areas which are all to do with the terms of legal contracts in various jurisdictions and which are therefore outside the remit of our language forum.

    I'm therefore now closing this thread: thanks to everyone for their contributions, which I hope stephenlearner has found useful. DonnyB - moderator.
     
    Status
    Not open for further replies.
    < Previous | Next >
    Top