The eat-up mortgage can also be very useful for you in 2021 and 2022 to get extra money if there is equity in your own home. How does this mortgage work? If you are concerned about your income and would like to have some additional income, then these types of mortgage may be suitable for you. The credit mortgage is a variable mortgage and comparable to a revolving credit. Use the equity in your home as an extra income and savings pot. The surplus value that you can use is equal to the estimated sales value of the home minus the mortgage already on the house. Anyone on welfare must first eat their house. This is also possible with a credit mortgage from the municipality. What exactly is a credit mortgage, senior mortgage or consumer mortgage?
Take out a senior mortgage
- What is an eat-up mortgage and how can you get extra credit for the equity in your home in 2021 and 2022?
- Do not have sufficient income, but have your own home
- What is the foreclosure value in 2021 and 2022?
- What is a credit mortgage for mortgage?
- Mortgage market offers mortgages to eat up the surplus value
- Apply for a credit mortgage
- What does a credit mortgage cost in 2021 and 2022?
- Advantages of a credit mortgage
- Disadvantages of a credit mortgage
- Credit mortgage providers
- Social assistance amounts for 2021 and 2022
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What is an eat-up mortgage and how can you get extra credit for the equity in your home in 2021 and 2022?
The terminology senior mortgage, credit mortgage, reverse mortgage and consumer mortgage are often used interchangeably. A credit mortgage can best be compared to a consumer credit, where your own home serves as collateral. In fact, you can cash in on the equity in your home this way. In this construction, the Credit Mortgage can, in addition to the home itself, also be used for all kinds of consumer purposes. The interest rate is estimated to be on average 3 to 4 percentage points lower than with a normal consumer credit. Logical, because the risks are less for the bank, because the value of your house serves as collateral. And a lower interest rate is certainly worth it.
Do not have sufficient income, but have your own home
Research indicates that for people between the ages of 55 and 75, about 65 percent are concerned about the level of their current and future income. Everything is becoming more expensive: higher healthcare costs, fewer social services and the expectation of high inflation/taxes are concerns for many in that age group for their own financial situation. When taking out an additional mortgage, flexibility is very important. Moreover, in this age group a significant part of the mortgage has often been repaid and there is excess value. The desired flexibility is reflected in the credit mortgage. The advantage is that you do not have to sell your house, but you can borrow relatively cheaply. The requirement here is often that the mortgage can amount to a maximum of approximately 75 to 85 percent of the foreclosure value and that the mortgage must be affordable with the (future) income. A possible disadvantage is that a variable interest rate often applies. As a result, the mortgage burden varies: it can be better or worse with changing interest rates.
What is the foreclosure value in 2021 and 2022?
The foreclosure value of your home for an existing home is 80% to 85% of the free sale value and for a new-build home it is 90% of the purchase price including the price of additional work. This is determined by an appraiser. If the mortgage is not that high, the bank can also use the WOZ value as an indication and thus estimate the foreclosure value. An excess value is created if house prices rise and you have repaid (monthly) on your home. That surplus value can be used.
What is a credit mortgage for mortgage?
A credit mortgage is a flexible form of mortgage in which the customer and lender agree on a credit limit. Up to that limit, the customer has freedom to deposit and withdraw money. A major advantage is that interest is only paid on the amount that is actually withdrawn. For example, with the interest-only mortgage, you immediately pay interest on the total mortgage amount. In fact, this is inefficient: you pay interest not on what you actually withdraw, but on what you might ever need. It is exactly the other way around with the Credit Mortgage.
Mortgage market offers mortgages to eat up the surplus value
The credit mortgage market is a large market. The aging population also means that there is a large group of people who may find it attractive to take out a credit mortgage. So there is still a long way to go.
Apply for a credit mortgage
The credit mortgage is primarily a solution for target groups such as:
- Who temporarily needs extra money for a renovation.
- Anyone who wants to cash in on the equity in their home. This is an extra income in addition to the pension or AOW.
What does a credit mortgage cost in 2021 and 2022?
For the most affordable and lowest mortgage interest rates, check out the offers from various banks:
- Silver Living;
- National Netherlands.
We are still working on the healthcare mortgage, in order to have sufficient income to pay your healthcare costs: what is a healthcare mortgage, the reverse mortgage?
Advantages of a credit mortgage
The main advantages of this mortgage are:
- A lower interest rate than on consumer credit.
- It is cheaper because you only pay interest on the amount you take out as credit.
- Great flexibility in terms of withdrawing money and repayment options. There is no mandatory repayment up to the credit limit.
Disadvantages of a credit mortgage
The main disadvantages of a credit mortgage:
- The interest is variable. This is nice when interest rates fall, but not when mortgage rates rise.
- Because you use the money for consumption, the interest is not tax deductible as mortgage interest.
- The mortgage is usually a maximum of 75% of the foreclosure value. This value can decrease and increase over time.
Credit mortgage providers
The credit mortgage, also called eat-up mortgage, can now be taken out from some providers. Robeco offered these types of structures for a long time, but you can also choose from insurers such as Aegon. Always ask for the financial information leaflet and ask what the tax consequences may be for you. In principle, for consumer use, deduction of mortgage interest is not possible. So ask clearly what this means to you. It goes without saying that the credit mortgage can also be an excellent option for people who assume that they will not live in their home in the future. For example, for medical reasons or because they want to leave for a beautiful place abroad after some time.
Social assistance amounts for 2021 and 2022
Even if you are on social assistance and therefore have to buy your house first, a credit mortgage is possible. This last process is done via the Social Insurance Bank. In the case of social assistance, no interest will be charged during the ten years of repayment or during the social assistance period. But social assistance benefits alone are not a big deal.
Also have some calculation exercises done at your request. Using the calculation examples of a credit mortgage, you can get an impression of how quickly your home will be eaten away. You can of course always request a quote from different providers of a senior mortgage.
- Redeem mortgage & house with Florius
- Redemption for seniors: renovation of their own home