Do you want to buy a house? You probably don’t have enough financial resources to pay the purchase price in cash. You will have to take out a mortgage. Do you know enough about the different mortgages? How do you choose the right mortgage provider? Some tips are probably welcome.
The tips mainly consist of the choice you make regarding the chosen loan form. Fortunately, you will find enough providers on the internet that immediately show the current interest.
This can give you a good indication of the interest rate that you should take into account. The lowest percentage that I have come across is at the time of writing 3.05% for 30 years fixed and without National Mortgage Guarantee. about the NHG I will inform you how you qualify.
Types of mortgage
Until 2019 there were many types of mortgages: the savings mortgage, the interest-only mortgage, the investment mortgage and the hybrid mortgage. Did you take out a mortgage for 2019? Then it is perhaps one of these forms. Until 2019, the interest on this type of mortgage was deductible. The consumer who has / has had one of the above mortgages will in the meantime have switched via an offer from the bank to an annuity or a linear mortgage. Important, otherwise no interest deduction can take place.
You repaid an annuity mortgage completely at the end of the term. You pay a fixed amount per month. Initially you mainly pay interest. Later you mainly relieve. You can therefore deduct a lot of interest at the start of the term. The monthly charges are therefore low. You pay off later and pay less interest. So you can deduct less. The monthly charges are therefore higher. In the image below you can see the course of this mortgage type during 10 years.
Search for the best mortgage
Are you buying a house for the first time? You then have to look for the mortgage with the lowest costs, because you do not want to pay too much for 30 years. How do you search for the best mortgage? A few tips:
It seems logical to take out the mortgage at the bank where you have been a customer for years. However, there are probably lenders who offer a mortgage with a lower interest rate or better conditions. Here you see an overview of the current interest rate with a 30-year fixed-rate period, which you can adjust as desired.
Independent mortgage adviser
It is therefore advisable to have an independent mortgage adviser compare the conditions and interest rates of the various lenders. That comparison can help you find the right mortgage. You can also easily find on the internet what the interest is at the moment to get an indication of what is common. You can then use this information as a guide for advising a requested quote. If this offer is much less favorable than what you have found on the internet, then you know that you have to look further.
Do you opt for the lowest interest rate?
It seems logical to opt for the mortgage provider with the lowest interest rate. Don’t forget to also delve into the conditions attached to a mortgage. Unfavorable conditions can cost you a lot of money later.
Not all costs are covered
Remember that when you take out a mortgage you also incur costs that are not covered by the mortgage. These costs amount to approximately 6% of the purchase price. The one-off costs include the costs for mortgage advice, brokerage fees, transfer tax, appraisal costs and notary fees. You must pay these costs with your own money. Do you not have enough of your own money? Perhaps you can get a Starter Loan from the municipality. Another option might be to buy your first home with financial support from your parents.
Debts reduce the amount
Remember that debts have a negative impact on the maximum mortgage amount. Do you want to take out a high mortgage? It is then necessary to reduce any credit you have with your bank or credit card. Do you have a student loan? Remember that your study debt also decreases your maximum mortgage.
Do you have a well-filled savings account? You can then consider putting part of your money into your own home. You then have to pay less. The monthly charges are therefore lower.