Calculating your maximum mortgage depends on various factors. This depends on your personal financial situation. What is the income and income of a possible partner? How much certainty do you have about this income in the future?
Do you have your own money that you can contribute to the mortgage? And very important: do you have other loans? But what is the effect of these other loans on your maximum mortgage?
Why does a loan affect your maximum mortgage
When determining your maximum mortgage, your mortgage provider will, among other things, look at your spending limit. If you have a different loan, you pay interest and repayment on a monthly basis. This reduces the spending limit that you have and therefore your maximum mortgage.
Which loans affect your maximum mortgage
With a loan other than your mortgage, you quickly think of a personal loan. But also standing at your bank or a credit card debt is seen as a loan. These loans also have an effect on your maximum mortgage. In some cases, it is wiser to pay off these debts before you take out your mortgage. Therefore, discuss this with your mortgage adviser.
What is the influence of a GFI registration
As soon as you take out a loan, not being a mortgage, it will be registered with the Credit Registration Office (GFI). Having a GFI registration is not necessarily negative. This will be the case if you have a negative registration due to payment arrears.
Do you have a GFI registration, but do you always pay on time and have there been no problems in the past? Then a GFI registration in itself has no extra negative impact on your maximum mortgage.
Please note: the total debts are registered with GFI. They only see what the spending limit, credit or original loan is, but not what you have already repaid. Do you have the option of being read at your bank? Then this is registered for your maximum credit, regardless of whether you use it. In such cases, it is often more sensible to cancel this credit facility. Even if you have debts that you have virtually repaid, it is wiser for the maximum mortgage to be repaid instead of leaving the last remainder.
Your maximum mortgage is 200,000 dollars based on your income. You have a personal loan for an amount of 15,000 dollars. You have now repaid this, leaving 2,500 dollars outstanding. But when determining your maximum mortgage, your mortgage provider will only see this 15,000 dollars and not the amount that you have already repaid.
Your spending limit is then an important part of determining your maximum mortgage. How much could you spend on housing costs on a monthly basis based on your income and mortgage interest? Suppose this is 12,000 dollars per year. With this you would end up with a mortgage of 200,000 dollars. But this is before your other loan has been taken into account. The spending scope for your housing costs is actually reduced by a notional credit charge of 2 percent per month on the total debt. In this example this is: 15,000 dollars * 2% * 12 months = 3,600 dollars per year.
This means that your maximum spending limit per year is not 12,000 dollars, but 12,000 dollars minus 3,600 dollars = 9,400 dollars. Based on this spending limit, you cannot borrow 200,000 dollars for your mortgage, but maybe only 150,000 dollars. In this case, you would certainly do well to pay off the remainder of the debt of 2,500 dollars so that this has no effect on your maximum mortgage.
The effect of your study debt
A common debt is the study debt. This debt is not registered with GFI. This debt was often not mentioned when applying for a mortgage. However, based on this you can later have problems with your monthly payments. You are therefore certainly advised to state this study debt.
In 2019, an adjustment to the system at DUO will make it possible for mortgage lenders to request a statement of your study debt. This statement can be made mandatory by your mortgage lender when building up your mortgage file. To avoid unpleasant surprises and possible payment problems in the future, it is always recommended to mention this debt during your mortgage interview.
Calculate your maximum mortgage
Do you want more information about the effects of your debts on your maximum mortgage? Then consult with your mortgage adviser in your area.