Owning a home with a starter mortgage remains a dream for many. Many young people grew up in a parental home which in most cases their parents were the proud owners of. It is not without reason that we say that we grow up in our country with a brick in the stomach.
It is therefore logical that many young people also dream of becoming the owner of their own house. Unfortunately, this is not for everyone because since the crisis, banks and mortgage lenders have become more cautious and the requirements for a start-up mortgage have been tightened considerably.
When you think of your own house, you soon think of the word mortgage and monthly repayments of a home loan. Everyone is sufficiently aware that taking out a loan for your house in these economic times is no easy task.
The mortgage starter is trying to find an answer to this. As the name suggests, this type of mortgage has been specifically created for young people who want to buy their first home. Let’s take a closer look at this financial product so that you get a better view of its possibilities.
Although our economy has not yet recovered sufficiently from the last economic crisis and there are few signs of a recovery in our economy in a short time, the purchase of a house remains cheaper in the long term than renting a house.
That is the main reason why both young couples and single people choose to buy their own home instead of renting one. Then you choose a savings mortgage, starter mortgage, etc.
Currently, the average rent of a home is still considerably higher than the amount of the monthly installments of the same home. Yet it is becoming an increasingly important step for young people to buy their own house and to meet the conditions to qualify for a mortgage or a bank loan to pay off a house. The latter is related to the fact that the average house price, despite the economic crisis, has not yet fallen significantly.
This fact, and the fact that employees who are at the start of their careers often have a lower wage than their middle-aged colleagues, makes it still difficult for young people to get a home loan from the bank. Because of their lower income, young people are less able to save and that is why they often do not have the capital to take out a loan from the bank.
The start-up mortgage was created specifically to meet the needs of young couples and single people who want to buy their own home. You may now be wondering why a starter mortgage would be different than a regular home loan.
Whoever borrows money must always repay the borrowed money and this is no different with this type of mortgage. Where is the difference and why would you opt for a start-up mortgage?
A mortgage starter is not just a loan for a house that is aimed at young people. This type of mortgage takes into account that you have a lower wage at the beginning of your career than at the end of your career.
Furthermore, it is not necessary to have a large starting capital at the start of this loan. After all, the bank that grants a starter mortgage not only takes into account your current earnings, but also the fact that your wages will increase with a normal career.
A mortgage starter is taken out on the basis that you have lower income at the start of the loan. The amount of monthly repayments including interest is adjusted to your income. This means that you will repay a lower amount in the beginning and a larger amount at the end of the term, if you have higher income.
If you look at the lowest monthly charges at the start, you may get the impression at the start of the term of the mortgage starter that this type of mortgage is cheaper than a regular mortgage. In reality, nothing is less true: the final costs associated with a starter mortgage can be compared to those of a regular home loan. As always, you must keep in mind that borrowing also costs money.