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Theory about Buying Property watch

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    I have a friend who has this theory...

    He says if you enter into an agreement to buy a property worth £200k and you end up paying £190k, he says you don't own £190k of the property.

    He seems to think you don't own a single breeze block until you've paid the FULL £200k.
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    Care to elaborate? That makes zero sense. Do you mean you're paying £200k for the house but still have £10k on a mortgage?
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    (Original post by Dekuyper)
    I have a friend who has this theory...

    He says if you enter into an agreement to buy a property worth £200k and you end up paying £190k, he says you don't own £190k of the property.

    He seems to think you don't own a single breeze block until you've paid the FULL £200k.
    Depensd exactly what the contract says and what the terms of agreement are. You can enter into any agreement you want. If the contract says pay 200k, and get this house, then unless something else was agreed off-the-record, you can't argue that paying 190k entitles you to 19/20 of the property. You have to interpret the agreement literally.
    You could argue that they should refund you the money.
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    (Original post by Dekuyper)
    I have a friend who has this theory...

    He says if you enter into an agreement to buy a property worth £200k and you end up paying £190k, he says you don't own £190k of the property.

    He seems to think you don't own a single breeze block until you've paid the FULL £200k.
    He is correct. The purchaser owns £190K of capital invested in the property but will not fully own it until the mortgage debt of £200K is repaid in full.

    If it's purchased with a conventional mortgage, then the ownership title deeds cannot be transferred exclusively into the purchasers name until all loan capital is paid in full.

    Until that event, the loan company in essence owns the property and can force a sale and eviction if the purchaser defaults on mortgage payments.

    Only equity released from the sale and after debts are fully satisfied, will the benefactor get the balance of monies.

    So yes, the purchaser has the right to live in the property as long as he/she complies with the contractual terms of the mortgage. Until such time as all of the capital in the mortgage is repaid, the loan company holds first rights to recover the debt from the proceeds of a forced sale in the event of a default.
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    (Original post by uberteknik)
    He is correct. The purchaser owns £190K of capital invested in the property but will not fully own it until the mortgage debt of £200K is repaid in full.

    If it's purchased with a conventional mortgage, then the ownership title deeds cannot be transferred exclusively into the purchasers name until all loan capital is paid in full.

    Until that event, the loan company in essence owns the property and can force a sale and eviction if the purchaser defaults on mortgage payments.

    Only equity released from the sale and after debts are fully satisfied, will the benefactor get the balance of monies.

    So yes, the purchaser has the right to live in the property as long as he/she complies with the contractual terms of the mortgage. Until such time as all of the capital in the mortgage is repaid, the loan company holds first rights to recover the debt from the proceeds of a forced sale in the event of a default.
    Thank you for your clarification my friend.
 
 
 
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