Calculate and take out a WOZ credit. A WOZ credit is a type of revolving credit. A maximum credit limit is determined based on the WOZ value of your owner-occupied home. Owning your own home is therefore an absolute condition for taking out a WOZ loan. The money can then be freely withdrawn and you can spend it on things you want.
What is a WOZ credit?
The WOZ credit is a type of revolving credit. The only difference between a WOZ loan and a normal revolving credit is the collateral. For a WOZ loan you must have an owner-occupied house that serves as collateral. Because an owner-occupied home is available as a backup, the lender can offer a lower, cheaper interest rate. A home offers a certain degree of security in the event of default, allowing risks to be minimized. When you calculate and take out the credit, you determine the maximum desired loan amount. You are then completely free to determine how much money you want to withdraw and what you want to use it for. The term is not fixed. You can also withdraw withdrawn money that has been repaid, as long as the credit limit has not yet been reached.
What can you do with a WOZ credit?
If you take out a WOZ loan, you agree on a credit limit. It is not yet known exactly how much you want to spend. This credit is often used for home improvements and renovations. This credit is also taken out to gain additional spending space over a longer period. You can freely withdraw the credit and make deposits on it.
What does the credit cost during the term?
You pay interest on the borrowed credit, variable interest. The outstanding balance must be repaid. You pay a repayment of approximately 2% per month. This is a fixed percentage that is quite low compared to other credits. This is because of the collateral, the owner-occupied home. The length of time you make repayments each month depends on the amount of credit taken out and whether the credit limit has already been reached.
The advantages and disadvantages of this form of credit
This form of credit has advantages and disadvantages.
Benefits of WOZ credit
- low interest rate
- interest is due on the outstanding balance only
- quick access to the money
- no closing commission
- no notary fees
- no appraisal report required
- possibility for additional repayment
- repaid debt can be redrawn
Disadvantages of WOZ credit
- only possible if you own a home
- variable interest rate
What should you pay attention to when calculating and closing?
If you want to take out a WOZ loan, you would do well to pay attention to a number of points. This way you prevent financial problems in the future. Things you should definitely pay attention to are: your own financial situation; risks you run and compare providers.
Your own financial situation
Depending on your monthly income, you can reserve a certain amount to repay the borrowed credit. Before you take out a WOZ loan, it is wise to determine how much money you can spare each month for the repayment and interest owed. Please note that you can bear the monthly costs with your income.
- In certain situations it may be useful to take out term life insurance. This partly depends on the amount of the credit limit.
- Another risk is the loss of monthly income.
- What you should take into account in the monthly costs is an increase in the interest rate. After all, this is variable and follows movements on the money market.
Compare providers of a WOZ credit
There are many providers of WOZ credit on the market. A good comparison in advance is always wise. Pay close attention to the differences between the lenders. A useful tool to quickly compare multiple providers is a comparison site.