You usually need a loan to buy, build or renovate a home, and that is not nothing. This will probably be your biggest loan ever, because it involves a lot of money. There are a number of ways to optimize your home loan. First, find out who the cheapest providers are with the lowest APR. The annual percentage rate is the interest rate plus the borrowing costs together, and this determines your monthly payment. To get an idea you can go to the comparison page to perform a free loan simulation.
You can use partial loans for a mortgage loan.
Instead of taking out 1 loan for a long term, you split it into different terms, for example 1 loan for 15 years and 1 for 30 years. As a result, the interest charges go down, but you can still continue to enjoy tax deductions. This advantage is a home loan on the only own residence, not for a holiday home next to you.
Also ask questions about a mortgage mandate. This means that the loan is not registered with the notary, so you do not have to pay those costs. But note: this is only useful if you have taken out a relatively low home loan. You can no longer enjoy the tax benefit because it is based on a minimum loan amount. So check whether or not the home loan you took out qualifies for tax deduction.
Enter various banks and negotiate!
Negotiation is not so ingrained in our culture, but you can save yourself thousands of USD by reducing the bank’s official interest. First view online who offers the best interest and borrowing costs, and also read the fine print. The APR is of course very important – the lower the better – but a mortgage loan from a bank also comes with by-products.
By-products are, for example, life or debt balance insurance and a home insurance. Although you are obliged to close it, it does not have to be done at the same bank. A bank does not give you a home loan from the goodness of its own heart. A bank wants to make a profit. By-products usually compensate for the reduced interest for you, because you often pay (much) more for the policies than with another insurer. So don’t be fooled and check where you get the best deal by doing your calculations.
Are you using energy-efficient floors or windows? Depending on the energy saving you may be entitled to a premium. You can also receive a free ‘guaranteed living’ insurance policy under certain circumstances. Then you are covered if you suddenly become unemployed or incapacitated for work. Under certain conditions you can apply for a social home (which is significantly cheaper than on the property market) or a social loan (with a significantly lower interest rate). Finally, with a mortgage loan you can contribute certain costs for tax purposes, such as your repaid interest and capital and your debt balance insurance. Nice to take it, right?