How much can I borrow?
How much can I borrow? It is a question that regularly arises from people who want to take out a loan. How much money someone can borrow depends on a variety of factors. First, the professional situation of the borrower is crucial. The financial institutions want to know, among other things, what type of contract the borrower has, his financial situation (the income and expenditure) and how much he earns. The more favorable those factors, the greater the amount that they are willing to lend.
The question “how much can I borrow?” is usually accompanied by the question: “How much interest do I have to pay?” Just like when determining the loan amount, the professional situation plays an important role here too. The better that situation, the fewer risks the lender takes. And a lower risk profile goes hand in hand with a lower interest rate.
- Mortgage loan
- Personal loan
- Car loan
- Renovation loan
The quota, the ratio between the amount that the borrower wishes to borrow and the market value of the home, is also extremely important. The lower the quota, the greater the chance that the financial institutions will offer a lower rate.
Is a fixed interest rate the right choice?
It is not only important to ask yourself “how much can I borrow?” The interest rate that you choose is also very important. A fixed interest rate is clicked for the entire duration of the loan. The borrower is then certain that the monthly installments will remain unchanged.
Those who opt for a variable interest rate usually assume that interest rates will fall in the future. When that happens, he can take advantage of the lower rates. People who have chosen a fixed-rate loan and want to refinance their loan in such a situation must pay a reinvestment fee. This is therefore not the case with borrowers who have opted for a variable interest rate. On the other hand, the price tag of a loan can increase considerably if the market interest rate rises. The lenders base themselves on the so-called reference indexes. The monthly installments therefore depend on the interest rate that applies during the review.
The times at which the interest rate can be revised are laid down in a contract. The borrower therefore knows when the lender can adjust the variable interest. For example, that can be annual.
Price tag for mortgage loan
In addition to interest rates, there are other costs involved with a home loan. To start with, there are the costs, such as the notary and registration fees, that are associated with the registration of a mortgage. A mortgage guarantees the lender that he will get back the borrowed money when the borrower turns out to be a defaulter. If that is the case, the lender may sell the property.
Sometimes the lender proposes to conclude a mortgage mandate instead of a mortgage registration. The borrower does not have to pay any extra costs because a mortgage mandate is not registered in a mortgage office. The lender can decide at any time to convert a mortgage mandate into a mortgage registration. In that case, the borrower must still pay for the costs.
In addition to the mortgage registration, the lenders also charge file costs and any estimation costs. They can also propose to take out a number of extra products, such as a debt balance insurance, fire insurance or family insurance with a mortgage loan. All those extra costs (excluding mortgage registration, registration fees and notary fees) are summarized in the annual percentage rate (APR).
Compare mortgage loans
Thanks to the annual percentage rate of charge, it is much easier to compare loans. On our site we publish the posted interest rates of the Lite Lender. We hope with our overview the question ‘how much can I borrow?’ answer in part.
The interest rates on our site already give a small indication of how high the annual percentage rate can be. Although it is impossible to calculate the annual percentage rate in advance. That figure depends on person to person. What is the best rate for one person may not be for the other person.
The rates that we publish on our site are the official rates of the lenders. They can deviate from the rate that the Lite Lender put forward in the office. The final rate depends, among other things, on the professional situation, the financial situation (income and expenditure) and repayment capacity of the borrower. In any case, we recommend that you compare all rates on our site. That way you immediately know where you stand. And don’t forget: Borrowing also costs money.
Looking for another installment loan? Then be sure to compare the personal loans or renovation loans on our site.