You have decided to buy a house? Or have you dropped your eye on a building plot? To pay these costs you can call on a mortgage loan.
This home loan always goes with a mortgage. Which projects can I pay with a mortgage loan?
That depends on the conditions that the lender applies. Most creditors, however, allow you to buy a house, apartment or land with the mortgage loan without any problems.
How much can I borrow?
The amount that you can borrow via a home loan is determined by various factors. In the first place, the bank will ask about your monthly income. That can be your wages, benefits, fixed rental income, etc. Secondly, the bank is interested in the amount that you have already saved.
Most providers of mortgage loans will ask you to pay part of the purchase costs yourself. This can be done via the money in a savings account, for example. Finally, the bank will look at the value of the house. In exchange for the mortgage loan, the bank will receive a mortgage. This ensures that the bank can sell the house if you do not repay the loan.
What costs are involved in the purchase of a home?
When purchasing a house, there are more costs than just the price that you agree as seller and buyer. In any case, you will have to pay registration fees on the purchase of an existing house. The rate of registration fees varies depending on whether the house is located in Flanders, Wallonia or Brussels. In addition, you will also have to pay for notary fees and loan costs. The provider of the mortgage loan will also charge a fee.
When you take out the home loan, you also have to take account of the file costs of about 500 euros at the bank. So you do not have to pay an interest rate to the bank. You may also need to include renovation costs in your budget. That is the case if you want to remodel the house before you start living there.
Can I borrow more than 80% of the purchase price?
Currently, most creditors apply the rule that you can borrow a maximum of 80% of the purchase price of the house. This means that you have to pay 20% of the purchase value yourself. An example for clarification. Imagine buying a house for 300,000 euros. Then you can borrow a maximum of 240,000 euros. You have to cough up the remaining 60,000 euros yourself. That’s where the additional costs mentioned above are added. A well-stocked savings account therefore seems necessary.
Yet it is not impossible to buy a house without a lot of savings. Some providers give you the possibility to borrow 100% of the purchase price. In some cases you can even borrow up to 120% of the purchase price. This means you do not have to take out an additional loan for the notary and registration costs. Of course you have to take into account that the interest rate will be higher.
Fixed or variable interest rate
Both can be with a mortgage loan. A fixed interest rate is, by default, slightly higher than a variable interest rate. The advantage is that you pay the same fixed amount every month. This will remain so throughout the duration of the home loan. The variable interest rate may then rise again, but also fall within the limits agreed between the bank and the borrower. The number of possible revisions of the interest rate depends on the chosen formula (monthly, yearly, etc.). Which formula is best depends on your risk profile. Make an online mortgage simulation to know what the interest rate may be for your credit at worst.