Real estate is pricey and renting a house is increasingly expensive nowadays. You would like to buy your own home or a piece of land, but your savings are inadequate. With a mortgage loan you can have the money you need for the purchase of a house or piece of land. This form of borrowing often has a term of 10 to 30 years. A mortgage loan has a guarantee by a mortgage on your property. This means that the house serves as collateral for the loan. As a result, a lender has security in case of default.
There are different types of mortgage loans. The mortgage form is determined by the way of repayment. How much you can borrow depends on your financial situation and the value of the house you want to buy. Do you cherish the desire to become the owner of your own dream house? With a mortgage loan this is within reach.
A mortgage loan can be applied for by anyone aged 18 and over. The lender examines your financial situation to see if you can repay the mortgage loan. Your income, spending pattern and any debts are the factors that are looked at. This research is necessary because this limits the risks for the lender. In addition, this is also in your interest because it prevents you from taking out a loan that you can not repay. You can take out a mortgage loan alone or together with your partner, family member or friend. The agreement for a mortgage loan can be signed by several people. Please note that you first ask about the financial situation of the persons with whom you want to take out a loan for a house.
How much money can you borrow?
Before you receive a mortgage loan, the lender must check whether you are able to repay the loan amount. This depends on your income, the type of credit you want to close and the value of the home or land you want to buy. The costs you pay monthly for your mortgage loan can not generally exceed 33% of your entire income. If, for example, you earn 3000 euros net, your repayment limit will be around 1000 euros per month. Depending on your burden, family situation, the guarantee and the function of your income, this limit may, of course, differ. In addition to your monthly income, there are other criteria that play a role in financing. This concerns the guarantee that you can give, the estimated value of the house or land to be purchased and whether you finance part of the purchase with your savings. You get an idea of your borrowing capacity if you use a simulation tool. A calculation via this means gives you an indication of the limit that you have with a mortgage loan.
One-off costs are incurred when purchasing land or property. Of course you would like to know what these costs consist of. It is advisable to ask your civil-law notary to calculate the one-off costs before you take out a mortgage loan. You will be faced with one-off costs that can be divided into three categories:
– Costs of the estimator and file costs: The lender compiles a file before you receive a mortgage loan. An expert will then estimate the value of the home or land. You can inquire about these costs from various credit institutions.
– Notary fees: The sales contract and the deed of sale for the property are drawn up by a notary. The fee for the notary is legally determined.
– Taxes: You pay taxes for the registration duties, the mortgage right, the stamp duty and the VAT. The registration fee is 10% to 12.5% of the sales price.
Fixed or variable interest rate
You can opt for a mortgage loan with a fixed or variable interest rate. Both types have both advantages and disadvantages. With a mortgage loan with a fixed interest rate, you can be certain that the amount of the monthly repayment is fixed. The interest rate remains the same regardless of the term of the loan. You are therefore not faced with unpleasant surprises. A disadvantage here is that you do not benefit when a fall in interest rates occurs. It is best to opt for this type of loan if the interest rate is low or if you expect the interest rate to rise. With a mortgage loan with a variable interest rate, you benefit from interest rate falls. The formulas used for the variable interest rate are secured. This means that your rate can be increased but this can only be done with 1 or 2 points, so the risk is limited. A disadvantage is that interest rates may rise, which may mean that the term of your mortgage loan will be longer and you will have to pay a higher amount every month. The mortgage loan with a variable interest rate is interesting when there are high interest rates that are expected to fall.
Different types of credit
Mortgage loans exist in different forms. The options for rates and formulas for mortgage loans are diverse. These forms differ in the way you repay the loan. You can choose between a constant or variable refund. A constant repayment is the most common and you pay the same monthly amount during the entire term of your loan. In the beginning you mainly pay interest and little capital. If your loan expires then the interest rate decreases and the capital increases. The most common mortgages are:
– Mortgage credit with capital repayment
– Bridging loan and mortgages with a fixed term
– A combination of different types
– Mortgage credit with capital accrual
The refund period affects the amount you repay monthly. This also affects the total costs of your loan. You would be wise to adjust the term of your loan to your current financial situation. You can choose a term from 10 to 40 years. The longer the term of your loan, the lower the monthly amount that you will repay. Keep in mind the interest you have to pay for a longer period.
Under certain conditions, the government can grant tax reductions.
You are eligible if your credit is intended for the purchase, construction or renovation of a house in Belgium, the credit is taken out for at least 10 years and is guaranteed by a mortgage. You can find more information about this on the website of the Belgian government.
Shut down mortgage loan
Family expansion ahead? Do you have plans to start living together, or do you simply think it’s a shame to spend your money on renting a house? By taking out a mortgage loan you can pay for the purchase of your own home. With various lenders you can discuss the possibilities to come to a credit that suits your needs and living requirements.