Monthly Archives: June 2019

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Interest-only mortgage becomes taboo

However, homeowners with an interest-only mortgage are in a split. The banks want to “force” their customers to (partly) repay their interest-only mortgages. This repayment of an interest-only mortgage takes place at various times:

  • At the end of the term (usually after 30 years)
  • When selling the property
  • In the meantime through additional repayments

Bench at the wheel

Bench at the wheel

In the past, banks still arranged interest-only mortgages with an unlimited duration. In recent years this has been changed to 30 years. The banks have taken the lead. After 30 years, the customer must come to the mat and the interest-only mortgage will be taken.

The bank will then look closely at the relationship between the amount of the mortgage on the one hand and the value of the home and the income on the other. If the income is sufficient, the interest-only mortgage will be “forced” into an annuity / linear mortgage. The new term will also be determined by the bank. This can therefore be shorter than 30 years. In this case, the bank determines what a customer will pay per month.

If a customer is going to be difficult, the bank will point out to the customer the letters sent earlier about the repayment of the interest-only mortgage. Moreover, the customer will be told that he can always go to another bank. The chance is very high that every bank will use the same method.

Extra repayments in the meantime?

Extra repayments in the meantime?

The question is whether interim repayment on the interest-only mortgage is advisable. Of course this depends on the situation. However, there is an intermediate solution.

It is also possible to continue saving outside of the mortgage and only to pay off the repayment-free mortgage (in whole or in part) when the Hillen Act becomes applicable.

A homeowner still benefits from the interest deduction. Here too, what the other mortgage type is besides the interest-only mortgage is important.

Cabinet and banks unreliable

Cabinet and banks unreliable

In any case, it is clear that the interest-only mortgage has become taboo. In the coming years, the banks will do everything they can to get their customers to redeem them. If we take a look at the past then this is of course very strange.

Almost every homeowner was advised to close at least 50% of the mortgage interest-only. The banks themselves gave this advice to their customers.

This total has changed in less than five years. How changeable can a person be. It is clear that the government and also the banks cannot be trusted.

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Expensive Loans – How is that possible?

The eye rate is at the lowest degree ever. And I think the lowest stage has not yet been achieved. Good news if you want to take out financing. Because thanks to the low interest you are able to borrow money cheaply. Yet there is one ‘credit’ that will remain unchanged expensive: browsing red. Red numbers are the most expensive form of borrowing cash. Especially now.

Because while the borrowing price is falling, the interest price on red remains likewise.

In proportion, in the minus is thus only more expensive. How is that will possible? And more importantly, how may you avoid it?

cash

At the outset of 2016, we were more than eleven billion euros in Holland. An extremely high amount that will bank earns a lot of money through. Because while savings rates of interest have fallen from 2.3% to 1. 0% recently, the average interest rate on reddish colored declining at a minimum, from eleven. 7% to 10. 8%. This was the conclusion of a research by the Financieele Dagblad.

Why, you appropriately wonder. I don’t think the requirement is there. Consumers often have no idea how expensive a without is. Moreover, people tend not to change banks quickly. Consequently, banks will not compete with one another on the interest rate before reddish colored. There is too much ignorance within my eyes. That is why I carry on and insist: people, avoid reddish colored numbers!

Prevent being in the red

Avoiding debts begins with an insight into your finances. Just how much comes in every month and how a lot you spend. Are you in the red since you don’t get enough or since you spend too much? Take a crucial look at your income and costs and discover where you can save. And exactly how you can prevent red quantities on your bank account.

If you are structurally red, create a plan to redeem part each month and get out of the red amounts. Do you have savings? Then instantly redeem your red financial debt and switch off the reddish. You will receive little attention on your savings, but you will probably pay around 11% interest in browsing red.  

Continuous Credit as a less expensive alternative

coins

I understand that it can be sometimes easy to be in a particular red for a while. Certainly, should you not come out at the end of the 30 days.

But encounter shows that it is sometimes as well easy. That’s why it’s don’t to just start.

Are you still structurally lacking money or do you just enjoy having extra money? Then select a Continuous Credit. Such a credit score works the same as being in the particular red, but with a much-reduced interest rate (from 4. 4%). You only pay interest to the money that you withdraw. Are you currently not withdrawing extra money? Then you definitely also pay no curiosity. Very handy and much less expensive than being in the crimson. So do it!