How much can you borrow for a house?
Not only interest is important when you go shopping for the biggest financial decision in your life. Each bank or lender decides for yourself how much you can borrow for your home. Generally speaking, there are some factors that are decisive.
Monthly net (family) income
It is common knowledge that financial service providers will lend you a fair amount more quickly as your income is higher. If you have a permanent job for at least two years, that also works to your advantage.
As far as your salary is concerned, the general rule is that you may not spend more than one third of your net salary on paying off your loan (s).
However, there is another way to make your account exercise. Map all your fixed costs. So also those of your hobbies and the like. With the (largest) part that remains, you can then pay off your loan.
Tip. Make sure that you always have your wage slip and an extract from your savings account when you visit a bank or submit an application online.
The term of your loan
Discuss in advance with your lender the period in which you want to repay the mortgage loan . In principle, even loans up to 40 years are possible. The advantage of this is that you pay a lower monthly amount and therefore qualify for a higher loan amount. The disadvantage is that you pay more interest of course.
The percentage of the purchase price
Financial players derive money more easily for a home that they only have to finance for 50% than for 80%, for example. In the past few months, there was pressure from the National Bank to the banks to take and demand additional measures for loans above 80%. This would make such loans even more expensive. However, the government has rejected this proposal. In practice, it turns out that relatively many people need a 100% loan. Do not forget that in that case you still have to pay for all costs such as the notary.
The interest rates
It makes sense that you have to pay less per month for a certain amount at lower interest rates. Indirectly, this also determines the ease with which you get a loan. After all, you can more easily repay the borrowed amount.
Comparing remains the message
The percentage of the purchase price and your monthly net (family) income are for the most part fixed. You can, of course, get started with interest rates and maturities. However, do not limit yourself to these two variables.
It is recommended to all the conditions and the so-products compare . File costs, debt balance insurance …
The comparison exercise starts the easiest online. Do some simulations and compare the APRs (Annual Cost Percentage) purely on the loan, so not including insurance for example. You can make an additional comparison exercise for a debt balance insurance policy.
You can submit a credit application to the 2 to 3 best players on the financial market (in your personal situation). After all, this obliges you to nothing. Then you can negotiate. Those who do nothing will receive the interest rate that the bank proposes. However, those who are willing to put pressure on the bank can get away with a better rate.