The benefits of owning your own home

Ownership

Even though we are talking about home ownership, it doesn't hurt to give a wider idea of what

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ownership implies as a legal and economic term. Ownership refers to possession of an asset, any asset. Legally speaking, there is a distinction between movable property and immovable property. The first category constitutes personal assets and the second one, real assets (better known as real estate). Furthermore, there is another distinction between non-registered movable property (i.e. computers, house appliances) and registered movable property (i.e. Cars, Vans, Yachts).

Some personal assets (especially registered personal property) and real assets can be used as collateral to secure a loan. This entitles the lender to take legal action directly against the property and recover his money from the selling of the asset in a ( cheap life insurance ) short term legal process. This greatly reduces the risk of lending money and thus, the interest rate charged for these loans is considerably lower.

Benefits of Home Ownership

However, owning any asset (especially real estate) contributes to getting lower interest rates not only when applying for secured personal loans, but when applying for unsecured personal loans too. Ownership is generally a guarantee for the lender because it implies solvency (the ability to meet financial obligations on time.) in many ways. For starters, maintaining a property is not cheap, and thus, it shows the lender that you've been able to administrate your finances properly. But it also implies that in case you cannot afford the monthly payments and ( life insurance ) the lender has to resort to legal means to recover his money, there are more probabilities he will be able to get enough money from your assets to recover the amount owed and any legal fees he might incur in.

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