Borrowing money for a renovation, what should you look out for in today’s world of loans? A few tips for a solid choice!
Posted On September 2, 2020
Do you want to borrow money for a renovation? Compare all renovation loans for the best offer. By clicking on calculate you can immediately see how much you can borrow for a renovation. You can also request more information about the loan. In Holland you also have quite some possibility’s to check out loans. Especially geld lenen zonder BKR is very populair on sites about financial products.
What is a renovation loan?
A renovation loan is a consumer loan with a number of specific characteristics:
A longer term, which allows for a lower monthly charge.
A fixed interest rate and monthly amount, so that the interest is tax-deductible (subject to conditions).
In addition, a number of lenders offer a lower interest rate in the case of an owner-occupied home.
Also a renovation loan will be tested on your income. In addition, the various lenders apply a maximum age at which you can borrow money. The maximum age for a renovation loan is currently 74 years. Another thing that’s very important is the amount of creditcard debt that you have built up.
Renovation loan or mortgage increase?
Borrowing money for a renovation can also be done by increasing the existing mortgage. However, due to the longer term and tax deduction, the cost difference between a renovation loan and a mortgage has become smaller. In addition, for a renovation loan no closing costs are charged and a notary and valuation are not necessary.
Because the mortgage interest rate is still lower, a mortgage remains interesting with a high loan amount (from 25,000 euros). For lower loan amounts, speed and free of charge can be preferred with a renovation loan.
Renovation loan in addition to a mortgage
It is not uncommon to take out a renovation loan in addition to the mortgage in order to be able to borrow more. Because the maximum mortgage is based on a term of 30 years and testing on a fictitious charge, it is sometimes not possible to borrow extra. A conversion loan has a shorter term and is tested on the actual loan burden. This makes it possible to borrow more for a renovation.
In addition, a renovation loan does not look at the value of the house to determine the maximum loan. This is in contrast to mortgages where a maximum of 100% of the house value can now be financed, or 106% in the case of energy-saving measures.