Houses and apartments are becoming more and more expensive, but most of us will still buy their own home because it is also a good investment. Almost every purchase of your own home is accompanied by taking out a mortgage loan. What should you pay attention to when taking out a good loan for your house or apartment?
The family income
The most important criterion for getting a loan is your monthly wage. Your credit institution assumes that you can spend a third to a maximum of half of your family income monthly on current loans. People will also want to know
whether you have other loans or debts outstanding. Finally, they check whether you have a history as a bad payer. For this, financial institutions have a common database that they can consult. Finally, people look at the home itself.
Does the purchase amount correspond to the value of the building and what percentage of the purchase amount must be borrowed. They are, as it were, drawing up a risk profile when applying for a loan. Since the financial crisis, lenders have become more cautious and credit conditions are now being followed much more strictly than before. So you have to go a long way to take out a mortgage loan .
The cost of the mortgage loan
The interest rate naturally plays a very large role in the cost of a mortgage loan. But the duration is also important. If you shorten the duration of your loan from 20 years to, for example, 15 years, the cost price of your loan will fall considerably. In addition to the interest rate and the Mortgage
duration, tax optimization is also important. Sometimes it is cheaper to borrow for longer so that you can enjoy the tax benefit for longer.
The loan percentage is also important. Someone who borrows 100% of the purchase amount will have a noticeably more expensive loan than someone who only borrows 75% of the purchase amount. Every financial institution where you apply for credit will draw up the most favorable loan conditions for you, in which all these factors play a role.
Mortgage loan – Fixed or variable
If the short-term interest rate and the long-term interest rate are the same, there is hardly any difference between a fixed or variable interest rate. But this rarely happens. The variable interest rate will constantly change over the entire term of your loan and is usually lower than with a fixed interest rate. But a variable interest rate still has an important risk that you can only take if there is sufficient financial room in your family budget.
In general you can say that a variable interest rate will be approximately 1 percent lower than a fixed interest rate. However, 80% of borrowers still prefer a fixed interest rate. A variable interest rate is also cheaper if it can be revised annually than if it can be revised every 5 years. The risk is always limited because the percentage that the interest can rise is capped and the percentage that the loan can fall, on the other hand, is unlimited. Moreover, the interest rate cannot rise indefinitely.
Negotiate your mortgage
Many people wonder if there is a negotiating margin for their loan. Everyone has a colleague or neighbor who has been able to get a better loan. Well, that margin certainly exists. There is still a considerable difference between the advertised and the interest rate obtained. But the difference will never be no more than 0.2% to a maximum of 0.5%. But just as important as your interest rate is the price that you pay for your debt balance insurance and your fire insurance.
The financial institution or mortgage providers with which you are negotiating may perhaps give in to your interest rate, but sometimes dare to compensate for those associated products. you can also consider going to a different bank for each product, which means you have fewer means to negotiate with.
lenders without negotiating. Sometimes it is also cheaper to change banks or products during the term of your loan. In that case, however, the benefits must be weighed considerably in order to compensate for the costs that this entails. So you will not only have to pay a reinvestment fee of 3 months interest and go to the notary again and pay the deed and registration costs.