[Mortgage Is ‘Just A Fancy Bullsh*t Word For Paying Rent For 30 Years To The Bank,’ Says Real Estate Billionaire Grant Cardone — Here’s Why Renting Could Be A Better Financial Move
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“Debt incumbent home owners don’t go on strike”
He’s not exactly wrong. If you have a mortgage, you do not really “own” anything and essentially have a “landlord” through your lender.
You may not just be mad at renting/landlordism. Your ire may be for the generalized concept of private property.
If you have a mortgage, you own what you paid (except interests).
If you bankrupt and are unsolved on a mortgage, and they take the house, the house is sold in an auction, the bank gets what’s remaining in the mortgage, but the rest is yours.
The point being that your place of residence, the place where you possibly stake your roots and raise your family, is not fully yours and can just as easily be taken away if you suffer any type of financial misfortune or fail to keep up financially with the market around your community.
The relationship to your lender is very similar to a renter’s relationship to their landlord.
Equity is a benefit, surely, but indebting yourself for 30 years in a location you may have compromised for is the other side of it. And your relationship to a higher authority who truly owns your property remains (until the debt is paid, of course).
Inherently, it all comes back to private property and one’s relationship with its owners.
Is it though? Landlords typically have hot opinions on what you do with the property. Banks don’t care so long as you don’t literally destroy it. When I rented I felt stifled in things like modifying my place, adopting a dog, painting walls, etc. Owning my place feels a lot better even if it costs a lot more.
I get what you say kind of from a financial sense but even then it’s radically different. You can pay extra every month to get a mortgage finished early. Each year you get more and more equity and are in a better financial spot. When a lease renews your landlord has the option to say “I want more money, so you have to pay extra now” or just straight up refuse to let you live there anymore, and at the end you have nothing. And a foreclosure is a much lengthier process with more outs for a homeowner than an eviction is for a renter.
That assumes the house is auctioned for more than what is remaining on the mortgage.
If this happens because you lost your job in a recession and local home values are down (or stagnant), you’re probably not walking away with anything. Then I think you’d have to account for any liens caused by delinquency, which would further reduce any proceeds
Then add up the lost amount of money put in for maintenance+repairs in the time you’ve owned the house.
If you’re in a market where rental rates are much lower than what you’d pay monthly on a mortgage, you’d probably be much worse off by this point.
Is there even such a thing?
As weird and crazy as it sounds, yeah. Depends on your downpayment and a few factors, but if you’re just starting out, a decent chunk of the DC area has generally been cheaper to rent unless you’re for-sure sticking in the house for a while.
Wild. Here in the Netherlands any mortgage you can be approved for on a middle class salary will be 3/4 to 2/3 of the average area rent.
Just by virtue of the fact that banks have stricter rules for income to mortgage payment ratios.
Except there is an end to those payments after which you do actually own the roof over your head.
Plus, the lender doesn’t want to “renovict” you or pull any of the other bullshit that typical landlords try to get away with.
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