Mortgage loan increasingly limited
Borrowing money for the mortgage will become increasingly limited in the coming years. The rules are becoming stricter. In the past it was still possible to finance up to 125% of the foreclosure value of your home. If we assumed that the foreclosure value would be 90% of the sales value. This meant that you would be up to 112.5% of the free market value of the property.
In 2014 this percentage is only 104%. However, an important note can be made. In the past, the transfer tax was 6%. Now only 2%.
The maximum provision in the mortgage loan is being reduced rapidly. This means that you can borrow less and less with the mortgage loan. For the future, this means that you will have to bring more of your own money. In 2018, the mortgage loan may not be taken out higher than the free market value of the home. This means that the costs for the notary, mediation and taking out the mortgage, and the transfer tax, will have to be financed by the consumer himself. Taking out a mortgage loan therefore requires own resources. Incidentally, there is also a chance that consumers would rather take out a “normal” loan to finance the costs of the mortgage.
Mortgage interest deduction for the mortgage loan is also limited
In addition to the lower lower maximum mortgage loan provision, the mortgage interest deduction is also limited. This happens in two different ways.
Firstly, since January 1, 2013, you will only receive a tax refund on the part of the loan that you annihilate in 30 years.
In addition, the percentage is also increasingly limited. The maximum rate was 52% in 2013, in 2014 it is 51.5% and in 2015 it will be 51%. Every year the maximum deduction will be reduced by 0.5% to the percentage of 38%.
If you want to take full advantage of the interest deduction with your mortgage loan, you will have to take out a full 30-year annuity-reducing mortgage. Because you pay off a lot, the monthly installment may (temporarily) become too high for you. Then there is the possibility for a combination mortgage. You can then take out part of your loan as a repayment-free loan and part as an annuity loan. You will not receive a mortgage interest deduction on the interest-only part of the loan. But it can be a possibility to lower your (gross) monthly installments.
Mortgage loans more clearly arranged
All in all a considerable number of changes. Many of the matters relating to the mortgage loan are limited, or will be limited further in the coming years.
This seems disadvantageous, but there are also many advantages. Due to the standard reduction in the mortgage, the chance of a residual debt is getting smaller. After all, you are repaying more each month in your mortgage loan.
In addition, there are no more unclear and shadowy forms of borrowing. A mortgage has become a relatively simple product, no more investment mortgages or other types of mortgage loans. Just a big credit that you pay interest and repayment on a monthly basis. Borrow money clearly, easily and clearly.