Closing the second mortgage.
Taking out a first mortgage is one thing, a second is closing another, via a second mortgage an extra loan is actually taken on the same collateral. Did you borrow as much as possible with the first mortgage? Then you will have to prove for the new mortgage that the house has increased in value. In other words: that there is now an overvalue on the house.
Closing a mortgage is actually very simple. Indicate to a lender that you want a second mortgage, and they will see if you are eligible. On average, a mortgage is always taken out with the same lender as the first mortgage.
This follows from the protection rules of mortgage creditors. In the event of any defaults, the first mortgage lender has priority over any subsequent mortgage creditors. This means that the mortgage lender would fish behind the net, and in the worst case would see nothing more of his money.
Such a “higher risk” is then usually translated into a higher mortgage rate. As a result, the interest rate is lower than the interest rate on a personal loan , but still higher than that of a first mortgage.
Renovate your home?
Planning to renovate a house? Then an extra mortgage is an excellent opportunity. Because the interest on the second mortgage can be tax deductible for renovations, remodeling is often a lot cheaper.
Sour-earned savings can also remain unrelated to the savings account. The credit mortgage is a frequently used form of credit for renovations. The borrower can freely withdraw the amount up to his limit and repay the credit at his own pace.
Crossing the existing mortgage is an alternative to taking out a new mortgage. The disadvantage, of course, is that you will have to pay a penalty amount, compensation for termination. Comparing the termination compensation and searching for the best mortgage lender is therefore recommended.
Are there no snakes in the grass?
A mortgage, of course, also entails some costs:
- Closing costs for a new mortgage
- Notary fees for any purchase of a second home
- Costs for valuation. In order to show that the house on which the first mortgage runs has increased in value, the home will have to be valued. Such a valuation is of course not free of charge.
Mortgage for a second home:
A holiday home from thousands found? Before you make an offer on the house with your savings, it is good to know that a second mortgage is also possible. A disadvantage, however, is that the interest on the mortgage of the second house is not tax deductible.
There are also many lenders who want to take out a second home financing. Also browse through the range of credit providers in the holiday countries themselves. They often have attractive rates for second homes, and they can estimate the risks better than Dutch or Belgian banks.
The fact that certain countries, such as Spain, work with variable mortgage rates is all the best. Comparing mortgage rates for a second mortgage is a must.