What is a mortgage?
This is a guarantee or a guarantee for the lender, in most cases it is the bank with whom you take out a loan. A home loan is generally guaranteed by a mortgage.
What is a mortgage loan?
This is a loan for financing real estate: a house, a piece of land, an apartment, renovation work, … In most cases, the mortgage is established on the property for which you take out the loan. If you have another property, this can possibly be given in a mortgage.
How is a mortgage established?
A mortgage required:
- a mortgage establishment: the borrower and the lender make a written agreement that a mortgage is established for the benefit of the lender.
- a mortgage registration: the mortgage is registered in the registers of the mortgage office. The registration remains valid for 30 years and is renewable.
The mortgage registration is only possible with a notarial deed. This deed is drawn up by an impartial notary and must state the details of the home loan and the mortgage establishment.
Variable or fixed interest rate?
You pay off a mortgage loan via an interest rate that can be fixed or variable.
The fixed interest rate remains unchanged during the entire duration of the loan.
A variable interest rate can fall or rise. When the interest changes, it is determined in your contract. In most cases, the interest rate is revised annually, every three years or five years.
The variability of your interest rate is limited by a “cap” (upper limit) and “floor” (lower limit). For example, a cap of “+3” means that the revised interest rate may never be more than 3% above the original interest rate. With a “-2” cap, the revised interest rate may never fall more than 2% below the original interest rate.
Who benefits from a mortgage?
Both the borrower (borrower) and the lender (the bank). The borrower because of the tax benefits. The lender has a security, the property, when the borrower can no longer repay the loan.
Are there costs associated with a mortgage registration?
A mortgage registration entails taxes and costs.
These are calculated on the borrowed capital and contain the following elements:
- registration fees;
- mortgage rights;
- fees of the notary;
- various costs of the notary, eg for certain searches, stamps, etc.