Everyone has heard of a mortgage. But once you have to take out this yourself, you will of course want to know what exactly it is and what kind of mortgage you can best take out. You must understand that you have to pay a certain amount for this every month. If you don’t have this amount, you could end up in serious debt or even lose your home. That is why in this article I explain what exactly a mortgage is, why people take out a mortgage and how to do it.
What exactly is a mortgage?
A mortgage is a type of loan. This loan is intended to pay off your house. So every month you pay an amount of money for your house. If you can no longer pay this amount of money and become very indebted, your house will be sold. The bank will then auction your house, so that they get back the money from your debts.
Why should you take out a mortgage?
A house is often very expensive and many people cannot pay for it in one go. If you start saving for this, it usually takes a very long time. So it is better to take out a mortgage and pay the money in parts.
Calculate the amount of your mortgage yourself
Consider how much money you can and want to spend on a mortgage per month. This amount of money will approximately be the amount of your mortgage.
How do you choose your mortgage?
Choose a reliable mortgage lender. These are the best-known companies and banks. Request a quote from this mortgage provider. This states how much money you will borrow. Make sure you have enough money to pay for this quote. Deduct all your fixed costs from your monthly income. Then you take out the money you need for other things (food, drinks, clothing). Now you deduct approximately five hundred euros from this amount (to save). The amount that remains is the maximum amount you can borrow for your mortgage.
What types of mortgages are there?
First of all, you have the linear mortgage. This mortgage is the most popular choice. You repay the same amount every month. The interest you pay is always calculated on the remaining debt. In this way, the interest and monthly costs become less and less. You can also opt for an annuity mortgage. The interest is also calculated on the remaining amount, but you do pay a fixed amount per month. This amount consists of repayment and interest. In the beginning you repay little and pay a lot of interest. After that, the repayment increases and the interest decreases. You can also opt for a savings mortgage. You then pay a fixed amount of interest every month. You save the money to pay off the mortgage yourself with a savings account at the bank or life insurance. Finally, you have the investment mortgage. You pay a fixed amount every month. The interest is deducted here and the rest of the money is invested. At the end of the term, the proceeds from the investment must be enough to pay off the mortgage. With this mortgage you are taking a risk. You can also combine multiple mortgages into one mortgage; We call this a hybrid mortgage.