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Interest averaging cheaper in 2019 due to new rules

 

Due to new rules, interest averaging has become cheaper. Banks may not charge extra costs for averaging. Can your mortgage interest rate be lowered?

Only current costs with interest averaging

Only current costs with interest averaging

New rules for interest averaging apply from 1 July 2019. From then on, banks are not allowed to charge more costs than the ‘current financial disadvantage suffered’. Just as this is already the case with reshuffling. This means that banks are no longer allowed to charge interest surcharge when averaging.

Banks are now using this scope to cover the risk that customers will move in the short term and thus switch to another bank without penalty. It therefore becomes less attractive for banks to offer interest-rate averaging.

Consumers better protected with new rules

Consumers better protected with new rules

The new rules must protect consumers better. On the other hand, the right to reimbursement-free scope expires in the case of interest averaging. Previously, you did not pay penalty interest on 10% to 20% of the mortgage sum, just as with a transfer. After all, you do not redeem with interest averaging.

Interest rate averaging is a way to take advantage of the low interest rate. The interest you have set is then averaged with the market rate at the same bank. The costs are largely in the new interest rate, which means you ‘feel’ it less. Read more about the advantages and disadvantages of oversuiting and interest averaging.

As a result, interest averaging is especially popular with homeowners who want to lower their mortgage interest rates, but recoil from the high costs. The disadvantage is that you are still stuck to your old bank and mortgage. The saving is often lower than with a transfer, because you can rebuild the mortgage on the latter.

Do you want to reschedule or interest averaging? Start a calculation of your benefit without obligation.

(Temporary) stop interest mediation at banks

(Temporary) stop interest mediation at banks

The new rules also mean that interest-rate averaging becomes less interesting for banks. In an explanation, given their calculation method, it is no longer possible to offer interest averaging.

ABN AMRO also had to adjust the calculation system to the new regulations. As a result, interest-rate averaging at the bank was temporarily not possible. 

In it, ING indicates that it is already using the right method, which means that nothing will change for them. Goodbank does have to adjust the systems, but it continued to offer interest-rate averaging. 

Of the banks that now offer interest-rate averaging, three do not yet want to give a definitive answer about this service in the future.

No reimbursement for customers

cash

According to the Netherlands Authority for the Financial Markets, anyone who has used interest-rate averaging cannot claim reimbursement. After all, the interest surcharge was simply permitted. The regulator makes the comment ‘as long as banks have adhered to the rules’. This has not always been the case in the past.

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Is it worth reaching for a consolidation loan?

Consolidation loan

Consolidation loan

A consolidation loan is a bank product that serves to pay off earlier commitments. The bank chosen by the borrower allows the repayment of several existing debts, in return offering one loan, covering the amount necessary to return. The consolidation loan can be used to repay consumer, home and car loans as well as overdrafts on the borrower’s existing accounts or credit card debt. More exposition at nmsbaseball.com

Several loans (especially loans in cash and on credit cards ) can be converted into one – the most profitable option here is usually a mortgage. Interest on such a loan is usually a maximum of 6-9 percent. Meanwhile, the interest rate on cash loans is about 15% higher. As for the credit card – after exceeding the interest-free period, the percentage is very large – many cards reach the maximum legal limit, which is currently 24%.

Also, a client who does not own real estate can take a consolidation loan. The condition of profitability is finding a bank that offers the lowest interest rate on a loan without a mortgage (it can be 10-15%). However, here the savings will be less than for a mortgage.

Save on interest

Save on interest

So, by consolidating your loan, you can save on interest. But this is not the only advantage! Often, it is possible to spread the repayment over a longer period of time. Note here: when deciding on such a move, you should be aware that usually the amount that you will have to give back to the bank will increase compared to what would have to be paid back in a shorter repayment time.

Repayment of several loans at the same time often involves the necessity of making several transfers at a bank branch. One such transfer has a chance to cost up to PLN 5. Multiplying this amount by the number of monthly transactions and the number of months that the customer has to pay, it may turn out that the amount allocated to these fees will be significant – on the order of several hundred zlotys. Then reducing several transfers to one – what happens in the case of loan consolidation – will contribute to reducing borrower’s expenses.

However, you should exercise caution and caution when making consolidation decisions. Not everyone pays off. It is necessary to check whether the value of the property is sufficient for the bank to grant the loan in the amount needed by the client. Real estate valuation made by the bank causes additional costs for the borrower of several hundred zlotys (PLN 200-500).

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Before you refinance a loan

Housing loan

Housing loan

The moment for refinancing the zloty loan is perfect. Housing loan spreads in native currency fell to record low levels. Some banks drastically reduced their margins before the end of the year, wanting to improve sales, while others are seeking competitors’ clients who can already show a repayment history.

On the other hand, the uncertainty of how things develop does not give reason to believe that this will always be the case. On the contrary. It is known that from next year banks will be required to calculate creditworthiness more rigorously. Pursuant to the amended Recommendation S, a client taking a housing loan will have to demonstrate the option of paying off installments for a loan of 25 years, even if he repays the debt for a longer time.

That is why it is worth taking a look at the loan agreement and checking its margin. If it significantly exceeds 2 pp, it is a sign that you should seriously consider refinancing your loan. The operation has a chance of success even with a lower margin, if this is reduced accordingly, and the customer will not be forced to pay a high commission for early repayment of the loan.

What banks offer as part of refinancing?

What banks offer as part of refinancing?

There is no shortage of attractive refinancing. A customer with an 18-month credit history can transfer the loan to 100%. property values ​​according to the simplified path to DNB Nord. All you need is a statement of income to get a new loan, no commission, with a margin of 1 pp. If the customer goes through a full verification, he will receive a margin of 0.79 percent.

In each case, however, it is necessary to set up an account, which affects 5 thousand. PLN every month and accepting a credit card. 1.8 percent insurance is also involved. loan value for two years, and then 0.056 percent debt every month for the next three years.

He made the offer of DB PBC zloty loans very attractive. As a result, the bank is refinancing up to 90 percent. property values, no commission, with a margin of 1.1 pp. If the customer additionally chooses a regular saving program, the margin will be 0.8 pp. Additional necessary conditions to fulfill are a credit card and an account with remuneration.

There is also a chance to refinance 100 percent. property value without commission with a margin of 0.9 pp, if the customer, in addition to the current account and the card, also decides to make a savings program.

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How Credit Score Influences Personal Loan

An online personal loan can be the outlet for several of your problems. You can apply online and have the answer in minutes, in some cases it may not be positive and one of the reasons may be your credit score.

Understand how credit score works and how it can influence personal loan. In today’s post, we’ll help you with this task so that the dream of having an extra buck to make up your life can come true!

What is the credit score

What is the credit score

The credit score is a score given to each individual record regarding your relationship with the credit market. In other words, it is a numerical representation that banks and financial institutions use to know whether or not you are a good payer.

In order to do this, your debtor history, that is, the history of payment of accounts, of debts negatively (paid), your financial relationship with companies, accounts and credit cards that you have and your updated cadastral data is evaluated.

How Credit Score Scores Work

How Credit Score Scores Work

Through the analysis of the items mentioned above, each person receives a score that can vary from 0 to 1000 points. Each financial institution has its rules to evaluate the credit score, however, in general we can consider the following:

  • up to 300 points there is a high risk of default;
  • between 300 and 700 points, there is medium risk;
  • low risk for those who accumulate scores above 700 points.

That is, the higher your score, the better your chances of getting varied credit services , such as credit card, higher overdraft limit, financing and personal loan online. Pangloss, however, takes into account several factors and can even approve customers with a score below 300.

The influence of the credit score on the loan

The influence of the credit score on the loan

This is because a high credit score means that you are a good payer and therefore will fulfill your commitment to repay the loan. This gives the financial institution more security when it comes to analyzing your profile and deciding whether or not to give you the money. Often, the score will also have an influence on the interest rate that you will pay the institution.

So it is important to pay your bills on time, not to incur more debt than your pocket pays and to make good financial planning to keep your financial life healthy and increase your credit score.

Of course the credit score is not the only point evaluated. Providing up-to-date and accurate personal data is always important so that your request is most likely to be approved.

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A housing loan for what to pay attention before you choose a bank

A housing loan for what to look for when choosing a bank?

A housing loan for what to look for when choosing a bank?

There are many bank offers on the market related to housing loans (mortgage loans). The most important thing is to compare them, and thus pay attention to many parameters. That is why it is worth knowing more, because the easier it is to choose an appropriate housing loan suited to your needs.

Below, in addition, you can read the proposals of banks and advisers if you are looking for such a loan.

A housing loan for what to look for when choosing a bank?

A housing loan for what to look for when choosing a bank?

Having appropriate knowledge about the costs that are included in the mortgage, we can compare the parameters of offers in different banks and choose the best. Financial advisors, among others, act in this way. They check individual credit parameters and compare them.

However, you must know that you now need to have an own contribution of 20% of the value of the property being credited, in order to apply for the remaining part of the mortgage loan. In addition, of course, you must have adequate creditworthiness and creditworthiness.

A mortgage loan, or a residential loan, as with any other loan, also includes the costs of its granting and security.

The total cost of a housing loan

The total cost of a housing loan

The total cost of the loan, or CKK, is the sum of all costs associated with the loan. It is not only loan interest (due to nominal interest) paid with each installment, but also other fees. Of these, we can distinguish:

  • payment for processing the application – not all banks charge such fees,
  • commission for granting a loan – most often it is a certain percentage of the loan granted,
  • other fees that you should ask at the bank.

CKK does not apply to the costs of notarial fees borne by the consumer, in relation to whether it is not included in the APRC (read about below).

Mandatory fees are associated with a mortgage and a fire policy and other fortuitous events.

The total cost of a housing loan

The total cost of a housing loan

When comparing the total cost of a housing loan, you should pay attention to its APRC, ie the Real Annual Interest Rate. This is the cost of the loan on an annual basis.

This is practically the same as the total cost of the loan, but in percentage.

What does the APRC include? We find in its calculation the costs borne by the borrower, taking into account the time in which this cost is borne. With APY it is easier to compare home loans. The lower the APY, the cheaper the loan will be.

What affects the mortgage rate?

What affects the mortgage rate?

The interest rate on a mortgage is one of the factors that affects its price. Its height is influenced by two factors:

The bank’s margin, which is fixed throughout the loan period and will be specified in the contract. It is mostly influenced by LTV and the loan amount. Needless to say, the lower the margin, the lower the mortgage will be.

The margin may obviously change during the loan period with the consent of the bank and the borrower, an annex to the contract is signed. It often happens that the bank depends on its amount from the commission paid by the client. A higher commission is often a lowered margin.

The second factor that affects the interest rate is Jabank. It is independent of the bank and the change affects the amount of the monthly installment.

Home loan insurance. Not all are needed

Home loan insurance. Not all are needed

At the beginning, read the General Terms and Conditions of Insurance (GTC). Obligatory insurance is property insurance against fire and other random events. It is not necessary to buy insurance at the bank where you take out the loan. You can look for the cheapest insurer.

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A favorable mortgage – Only the analysis of loans will allow such a loan

A good mortgage for buying a house or flat. Compare interest rates on housing loans in banks. Purpose of the mortgage: building a house, buying a flat or a plot of land.

Review of proposals in banks and the opportunity to contact a financial intermediary who will help you find a bank and mortgage for free.

And here comes the basic question: what is a good mortgage for buying a flat or a house? Or maybe for the general renovation of real estate?

Assuming that you have the right creditworthiness and you know how much you need a mortgage, then you can read the offers of banks and choose a mortgage.

However, if you do not know whether and what your creditworthiness is, it is best to contact any bank or financial expert in this matter.

A favorable mortgage comparison

A favorable mortgage comparison

If you compare only two loan offers in the case of mortgage loans, then a little. It is necessary to compare many loan offers. And this is a time-consuming task. And to know this yet and know what to look for.

The mortgage calculator will not help you find the best loan. It can only be used to estimate the installment and, if necessary, to contact the selected bank or designated financial intermediary.

Currently, when you buy a flat or a house, you need a 20% own contribution for this purchase of a mortgage. Without the own contribution, it is not possible to obtain a loan, unless the bank requires a minimum own contribution of 10%. But the missing amount should be insured. Not every bank has such a loan offer. In which banks is it possible?

And, among other things, it is worth contacting a financial expert. It is a great and proven way to get acquainted with mortgage offers, find out whether and what creditworthiness we have and what documents are needed when applying for a loan. Of course, it is also a comparison of mortgage loans, and not two or three banks, but nearly 20!