Posted on 08/31/2023

First-Time Homebuyer FAQ: If I Have a Mortgage, Do I Own My Home?

2 minute read

Home financing can be a confusing process for first-time homebuyers, including the concept of ownership after closing on a mortgage. When you purchase a home via a mortgage loan, as a borrower, you are, in fact, a homeowner free to make decisions pertinent to the property (decor, renovations, construction, landscaping and so on). Even so, do you actually own the home you were lent money to purchase?

Simply put, yes; you do own your home. However, your mortgage lender does have interest in the property based on the documents signed at closing. These documents are explained throughout the closing process by your closing agent, along with your legal obligations and rights and those of your lender, including:

  • Mortgage Note. This is legal evidence of your mortgage and is a formal promise to repay the debt of your mortgage to your lender. It explains the amount and terms of your loan and possible penalties that can be imposed by the lender if you default on those terms.
  • Deed of Trust. This document lists your legal obligations and rights as well as the obligations and rights of the lender.  It also states the lender’s right to foreclose on the home if you default on the loan.

While your home serves as collateral for your mortgage, you—as a borrower—are the owner of your home as long as you meet the terms of that mortgage.

For more information about purchasing and financing your first home, download our free Mortgage 101 Handbook, a great resource for first-time homebuyers.