Choice of the best lender | Loans
Posted On May 29, 2019
When selecting a mortgage, naturally compares the interest rates of providers with whom we cooperate. This is because there is a lot of competition between banks and other lenders. This means that it is often possible to get a lower interest rate for your mortgage than you currently have.
However, we also look at other things than just the amount of your interest. Below are important issues that we also take into account:
The amount of your interest is also determined by risk surcharges at a number of lenders. If the requested mortgage is more or less equal to the current value of the property, then the interest rate due to this risk premium is higher than if the requested mortgage is (much) lower than the value of the property. The latter may, for example, be because you are financing part of the purchase price with equity. We often see this happening with people who sell a large property and then purchase a smaller one. These risk surcharges differ greatly per provider. To make a good choice, it is therefore important to work together with multiple providers.
Loss of income
Of course we hope that after the purchase of the home the customers can continue to live in this home with pleasure for many years to come. Unfortunately, that is not always the case. A divorce occurs regularly. In addition, we have regularly seen in recent years that customers have lost their jobs due to reorganisations and a sharp decline in income.
There are major differences in the way lenders deal with this. One lender goes a long way to help their customers in these difficult situations. From auspicious payment schemes to actively helping you find a new job. However, there are also lenders who are much less concerned with the customer in this case. As a consultant, we know these differences in customer approach. We also take this into account in our advice. Because of our experience we know that this can happen to anyone.
A third and final example of things that we pay attention to is the policy of the lender when a new fixed-rate period has to be chosen. When you take out a mortgage, you agree on a period during which the interest cannot change.
We call this fixed-interest. For example, you can opt for a 10-year period. You then have the guarantee that your interest will remain the same within this period. At the end of this period, the lender will make a new offer to you. If you do not accept the interest that the lender is offering you at that time, you can take out a new mortgage with another lender and pay off the first loan with this money.
That may sound attractive, but there are a number of disadvantages. The new mortgage again entails costs for the notary and the mortgage adviser. In addition, it is questionable whether the new lender is willing to provide the loan. In recent years we have seen that the prices of homes can fall sharply.
In addition, it is possible that your income position has changed. These are all things that can make it difficult to take out a new mortgage. At that moment you are very dependent on the offer from the original lender. If the lender decides to become less active on the Dutch mortgage market, this means that you will receive an offer with a relatively high interest rate.
If the value of your home or the amount of your income has declined, then you actually have no choice anymore. You will have to accept the high interest rate because you cannot turn to another provider. However, because we work with different lenders, we can usually still ensure a lower interest rate.
Through our experience we know the differences between the lenders. That is why we are happy to advise which provider best suits your specific situation.