The mortgage loan is the loan that you can take out if you want to buy or build a house or apartment. As this usually concerns large amounts, a standard term of 20 years is provided for the repayments, but this can also be increased to 30 years. The interest rate is lower for the mortgage loan than, for example, for an all-purpose loan, since the home serves as collateral and the lender therefore runs less risk. In addition, an outstanding balance insurance is also taken out to ensure the repayment of the loan in all circumstances. The amount that can be borrowed depends on your income and whether or not you borrow with your partner. The interest rate varies depending on whether you choose a fixed or variable interest rate.
A fixed or variable interest rate
Although a variable interest rate is often initially lower, it does not guarantee the lowest costs when looking at the full term of the loan. A variable interest rate will be periodically revised depending on the economy of the country in which you borrow and can therefore fall as well as rise. So there is a risk involved. With the fixed interest rate, you know exactly how much you will pay in costs at the start of the mortgage loan, but it is higher. The choice you make will usually depend on the period in which you start the loan and the size of the risk you are willing to take. When simulating the mortgage loan in advance, it is important to take different scenarios into account for a variable interest rate. This way you will not be faced with surprises later on.
Provide the necessary documents with a mortgage loan
If you wish to take out a mortgage loan, you must provide more documents than just an overview of your income and fixed costs. Proof of purchase is also required. This is usually the compromise that is noted when you decide to buy a house. The bank then knows exactly how much the home costs and uses this amount as the basis for the mortgage loan. Most lenders also offer the option to borrow up to 130% of the purchase value of the home, so that notary costs and the like are also covered. Request several loan quotes here so that you can make a comparison between the different providers and options in terms of interest rates.