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What amount of own money does it require to buy a house?
Have you laid your eyes on your dream property and would you like to know how much of your own money you need?
There are a lot of practical things to consider when buying a house. It is after all one of the largest expenses you will make in your life. A crucial step in this process is taking out a mortgage. What precisely is a mortgage and how does it work?
What is a mortgage?
Paying off a house immediately is not a financially possible for most people. In that case, a mortgage must be taken out with a financial institution. A mortgage is a loan to purchase a property and you pay mortgage interest on this loan. The bank will periodically deduct money from your account for up to 35 years or until you reach the age of 65. You will thus pay back the mortgage in small parts over a long period, making the purchase of a house financially attainable to all.
Types of mortgages
The annuity mortgage and the life mortgage are regularly taken out when purchasing real estate.
The annuity mortgage is a mortgage in which the monthly sum remains the same throughout the entire term. In the beginning of the term, you pay significantly more interest and pay off less. The most mortgage you pay off, the less interest you pay. You will have fully repaid your mortgage on the end date of the mortgage.
A life mortgage is a combination of an interest-only mortgage and a life insurance policy. You will not pay off your mortgage, you pay mortgage interest and an insurance premium. As a result, you will receive a compensation for the premium that you build up, which will ultimately pay off the mortgage amount in one go.
How do you qualify for a mortgage?
When applying for a mortgage, there are numerous things to consider. Both resident and non-resident can apply for a mortgage. Entrepreneurs and self-employed people can take out a mortgage too, however, it usually concerns a private mortgage.
There are various requirements that must be met when applying for a mortgage. Firstly, the monthly costs of your mortgage is not allowed to exceed 33%. The term of the mortgage may not exceed 35 years, the interest of the mortgage is fixed for the first 5 years. You can also repay up to 10% of the original mortgage principal amount without penalty.
Arranging a mortgage can be a complicated process. Fortunately, we can guide you through this entire process. In addition, we provide advice on the mortgage, you receive apporval for the application within a week, and we assist with appling for the additional insurance policies.