Many people who want to take out a mortgage only look at the interest rate. Not wise, because sometimes a mortgage with a higher mortgage interest rate is more favorable. For example, one lender will want to lend more than another, for example because the bank is prepared to fully include a second income instead of partially. The validity period of the quotation may also be important, as can the option that the interest on your quotation decreases if a lower interest rate applies at the time of approval. Below are a number of factors in which mortgage lenders differ. Decide for yourself which ones are important to you.
The percentage that you pay in interest on the mortgage amount.
Gross monthly mortgage amount
This is the amount you pay for the mortgage, before tax deduction.
Net monthly mortgage amount
This is the amount after tax benefit. So this is what you actually pay.
Fixed interest periods
Of course, the interest rate is lowest if you choose a short fixed-interest period. This does mean uncertainty about the monthly amount in the future. If the interest rate has risen, you will also pay more. With many mortgage providers you can choose to fix the interest rate for, for example, 5, 10 or even 20 years. Then the interest rate is higher, but it may be cheaper in the long term. In any case, it provides more security.
Some mortgage providers will want to lend you more than others.
Closing costs amount
When you take out a mortgage, you pay closing costs. These may differ per mortgage provider.
When calculating the amount to be provided, some mortgage providers will only want to include part of the second income. Other mortgage providers are willing to lend more because they fully include the second income.
Financing during construction
This is important for new construction. Not every institution provides a mortgage if construction still needs to be done.
Validity period of quotation
If the date of completion is far in the future, it is important to look at the validity period of the quotation. If the passage does not take place within the period of validity, a commitment fee will have to be paid. This is a small percentage of the entire mortgage amount. This can therefore add up considerably.
Interest rate adjustment
With some mortgage providers, the interest rate of the quote is adjusted downwards if a lower interest rate applies at the time of approval . This does not happen if interest rates have risen at that time.
You need a bridging loan if you have bought a new house, while your old house has not yet been sold. Not every mortgage provider offers this option
Are you allowed to make additional or full repayments on your mortgage, and if so under what conditions? These conditions and their costs differ per mortgage provider.
If you already have a capital insurance policy, it would be a shame to take out a new one. Especially because you will have little left over when you buy out the old endowment insurance. Some mortgage providers offer the option to link your current endowment insurance to your mortgage, while others require you to take out new insurance.
If the mortgage costs become too high, it is nice if you can convert part or all of the mortgage into an interest-only form. With a fully interest-only mortgage, you only pay interest and therefore do not have to make any repayments. Some lenders offer the option to convert your mortgage in whole or in part.
To move house
If you can commit to a long fixed interest period at a low interest rate, it may be interesting to have the option to include this mortgage when you move. You will then not pay any penalty interest when you move if you buy a new house before the fixed interest period expires. In addition, you can complete the fixed interest period and therefore perhaps get a cheaper price than with the interest rate that applies at that time.