What is a home loan / mortgage loan?
In collaboration with KEASY: our credit-broker www.keasy.eu
Do you dream of building or renovating a home in Luxembourg or abroad? Then read the following carefully
Our company strives to offer a complete and professional service. We are in constant contact with credit professionals both in the Grand Duchy of Luxembourg and in neighbouring countries. Turn our advantage into your own!
Which should I choose?
Be realistic: death and/or disability insurance is indispensable to secure a funding application. However taking out an insurance policy is often complicated. We will help you identify the important factors to help you invest in good guarantees at great prices.
A little theory goes a long way!
You take out Payment Protection Insurance when you want a mortgage. You may not be aware that this insurance is limited to the length of the loan and covers its payment in the event of death, incapacity or disability. You are not legally required to take out this insurance: however, it is one of the conditions for obtaining a home loan. It is optional for a consumer loan.
How to protect your loved ones? By insuring your loan!
It guarantees your lender is fully paid. This will most importantly protect your loved ones! And if you want a 100% repayment guarantee for everyone associated with the loan, opt for 100% cover.
Rule out any anxiety for your heirs!
The repayment of the outstanding balance owed is guaranteed in the event of Death/Total and irreversible disability. There is also an optional benefit in the event of unemployment.
How to negotiate the best loan?
Chow to negotiate the best loan ?
This section is designed to make you aware of certain practices by making the procedure simpler. We advise you to read the following carefully before taking out any loan:
- Check whether your lender charges any file fees before taking any steps and ask what type of fees they add (fixed price, whether paid in advance or after contract concluded)
- Negotiate these file fees by emphasising your loyalty to the bank.
- Request several loan quotes from as many organisations as possible. This can only work in your favour!
- If your bank doesn't offer the best rate, insist on it. If they can't match it, change banks. However, be aware of the service charges of any new bank!
- Very important: Be prepared for the gap between the due date of the loan and the date it is signed at the notary. The longer the interval, the more you will pay in fees!
- Check with your company to see if you are eligible for a 1% housing loan and consider a loan from your employer.
- There is specific help available for tenants, first time buyers, homeowners, landlords, and people with disabilities and also for professional mobility. Take advantage of a 1% housing loan... contact us!
- There are several deals available when opening a property savings account or a property savings plan: no file fees, no repayment penalties, great loan rates. There are many solutions to suit your needs!
- A 0 rate loan is already great... but if you want some good news, that is €1524 more you will have at 0 rate!
- Some loans allow you to reduce the local equipment tax. Great! Ask us for advice!
- Do you qualify for a subsidised loan (pension fund, civil servants, national aide scheme, etc.)? This may also help you reduce costs.
- Who could act as guarantor for you? A mutual company or a natural person? Which would be most beneficial in your situation? It's something to think about.
- Is there insurance available for your loan. This can be useful but it is not essential.
- Think about how to distribute life insurance if taking out a joint loan.
- Watch out for traps (unfair clauses, methods of calculating premiums, etc.) Read the terms and conditions carefully!
- If you are under 40, buy your death and disability insurance through a broker (to get the best terms).
- Unemployment insurance is a social phenomenon... but often pays incredible benefits!
- Interim interest will often increase your payments. Contact us for the best advice.
- Borrowing abroad? Consider the importance of being close to the lender. Study their contractual clauses before committing yourself!
- Are you paid irregularly? Customize your payment schedule and reduce the overall cost of your loan.
- Early repayment penalties do not usually apply to home loans but some organisations add them anyway. Be careful!
- Fixed rate or adjustable rate? Be in control of your loan.
- Of course you can negotiate notary fees!
- Maximize your personal contribution with a settlement, an interest free loan, a seller-provided credit enhancement or a cash payment.
- The resale of an asset can result in a financial loss. Choose a resale warranty.
- Transferring your loan will always allow you to benefit from better rates... while retaining your repayment terms
- Negotiate your early repayment allowances!
- Banks are always looking for guarantees. It's up to you to show your credibility, so they do not need so many assurances.
- There are numerous ways to fully or part finance your project. Find out about them all!
- Have you ever considered buying at auction? Anther solution for another situation.
- Are you married or living with a partner? Be realistic and buy according to your own specific financial situation.
- You can always sleep on it. Take the opportunity! It doesn't cost you anything, and you won't regret it later!
- A contract is established "on the condition that...". Read all the clauses carefully and use them to your advantage as much as your lender does.
- Fixed rate but a variable term? Don't make a mistake, ensure you get the right guarantees from your bank?
- Always choose monthly repayments and credit at a price you can afford. No matter how many years...
- Never forget that at any time, any one of us could be faced with a substantial unexpected debt.
- Specialist institutions or traditional banks? Each institution has its own advantages and disadvantages. Find out which best fits your needs.
- What do you think about property bundles? Judge for yourself and analyse your situation before rushing in.
- Specialist advice is priceless…
- Get in touch with Weicker & Co for a personal plan tailored to you!
Are you building or renovating in Luxembourg or abroad? Follow our guide...
- Tips and tricks for negotiating your loan
In this section you will find information taken from a brochure prepared by the Department of Housing of the Ministry of Small Firms and Traders, Tourism and Housing.
In the case of discrepancies between the legal texts published in the Memorial and the information presented on this site, the legal texts shall apply.
- Government guarantee
- Acquisition premium
- Housing premium
- Additional premium for architect and engineer fees
- Savings premium
- Interest rate subsidy
- Interest rebate
- Help for special fittings for physically disabled people
Different types of credit
Are you confused by the many types of loans offered by the banks? Prêt-Immobilier.lu will help you make the decision suited to your need. Do you want a little clarification? Here is a non-exhaustive list of the different types of rates.
Fixed rate loan
This is the simplest solution! Your rate is set when you agree your financing. It will not change for the length of your loan. This gives you security as the exact amount paid each month never changes until you've paid back your loan.
Variable rate loan
Are you willing to take a chance? With a variable rate, your loan repayments vary throughout the term of your loan depending on market fluctuations. Do you want to take risks? But not too many? Your loan can be capped i.e. there is a limit to how high or low the rate can go. In the end, you may benefit from a slightly lower rate than with a fixed rate.
And what about the indices? Generally, banks index their loans on an index called the EURIBOR. Sometimes a different index is chosen, the LIBOR CHF 3 months, which is the European Central Bank rate. Other lenders use external indices as a base.
Fixed rate resetter loans
If a compromise between the fixed rate and variable rate seems more suitable for you, choose a revisable fixed rate loan! You fix you loan for a few years after which it turns into a variable rate loan. The advantage is that you will know how much your monthly repayment will be for the first few years. Are you a young couple buying your first home? This type of financing is made for you!
OR opt for TAILORED financing…
Practical, simple and fast, calculate a sample loan by clicking here
Weicker & Co is an Authorized broker with the Belgian FSMA under the reference 62429 and Belgian company number 0893.901.520. Our brokerage company is authorized to perform free service in Luxembourg.