Mortgage

A mortgage is a loan to buy a home with. When you buy a home, you borrow money from the bank to help finance the home. Such a loan is officially called a mortgage loan. We usually shorten this to mortgage.

An interest-only mortgage is a type of mortgage where you pay only interest until the end date of the mortgage. In other words, you do not repay the mortgage. Because you do not repay the mortgage during the term, you must repay the loan in full, in one lump sum, at the end date. However, you can choose to make repayments during the term, but you don't have to. Often the term of an interest-only mortgage is 30 years.

With a linear mortgage, you repay the same amount each month throughout the term. The interest rate you pay gets lower and lower, so your monthly expenses also get lower.

Are you wondering what you can borrow if you want to buy a house? Then you can make a quick calculation online. To determine the amount of the mortgage, a mortgage lender looks, among other things, at the gross annual income. Based on this, an initial calculation is made of the maximum mortgage you can get. Of course, you are not obliged to go for a maximum mortgage. You must weigh for yourself how much mortgage you can and want to pay.

Before you start looking into buying a home, you obviously want to know what kind of mortgage you can get. A mortgage lender looks at when calculating the maximum mortgage:

• Your income
• Your financial obligations (such as student debt or alimony)
• The market value of the property you want to buy
• The interest

National Mortgage Guarantee, also known as NHG, is a mortgage scheme. This scheme is administered by the Home Ownership Guarantee Fund Foundation. This fund guarantees the repayment of your mortgage to the lender, should you run into problems with it. This offers the lender financial security, allowing them to give you an interest rate discount. This can quickly save you several hundred euros a year. In 2022, the NHG limit is €355,000, but in 2023 it will be €405,000. If you meet the conditions, you can get an NHG mortgage for any home you buy.

When applying for a mortgage, you must provide several documents. Your mortgage lender or advisor will give you a list of all the documents needed. These include:

• A preliminary sales contract (existing home) or the purchase/contracting agreement (new home construction)
• A copy of your passport/identity card
• Employer's declaration
• Paycheck(s)
• Annual statements
• Current statements of your bank and savings accounts
• Printout from mijnpensioenoverzicht.nl
• A list of debts
• A statement of your current student debt

Are you an entrepreneur? Then you must also submit the annual figures for the last 3 calendar years.

When you apply for a mortgage, the mortgage lender always looks to see if you have a BKR registration. This allows them to see what credit you have and whether you are behind on a payment somewhere. This way they try to estimate whether you can pay the mortgage. In most cases, a BKR registration affects the amount of money you can borrow. We distinguish two types of BKR registrations: positive and negative.

For example, a positive BKR registration is when you have a loan for which you are neatly meeting your payment obligations. A negative BKR registration is when you are 3 months behind in paying off a loan. With a negative BKR registration it is not possible to take out a mortgage with many lenders. Your mortgage advisor can give you more information about this. A positive BKR registration also affects the maximum mortgage amount you can borrow. You pay interest and repay the loan, leaving you with less money each month to pay the mortgage expenses.

Refinancing a mortgage means paying off your current mortgage and taking out a new mortgage. A new mortgage does not necessarily have to be with your current bank, but can also be with another mortgage lender. This can lower your monthly expenses. If the mortgage interest rate is lower than the interest rate you are currently paying on your mortgage, then you can gain a financial advantage by switching. After all, a lower mortgage interest rate means lower monthly costs. Keep in mind that there are costs associated with switching a mortgage. You pay advisory, notary and appraisal fees. Do you transfer your mortgage during the fixed-interest period? Then in most cases you will also have to pay a penalty.

Exactly how long a mortgage application takes varies by situation. On average, a mortgage application takes about 4 to 8 weeks. This is from the initial interview to the final approval from the mortgage lender and the signing of the mortgage deed. However, the application can also be complete as soon as a week after all the documents are submitted, but it can sometimes take longer.

A mortgage deed is the document that records all the details and provisions related to your mortgage.