Have you found the perfect home for you? Is it perhaps located on a small lake in the middle of the forest or in the middle of the big city where there is always life and bustle all around? Regardless of which home is your dream, very few people have enough cash to buy an entire home. Therefore, a mortgage is necessary. A mortgage is a loan like any other but the difference is that you have your home as collateral. This is because the value of such a loan is usually high and the bank needs that security.
When the bank wants to protect itself a little extra, it is normal that they only lend you 85% of the value of your home. This is to protect itself from falling in value.
What happens then with the remaining 15% of the housing. You need to deposit that amount yourself, which is commonly called a cash bet. There are a couple of different ways you can finance this and with both pros and cons.
Save or borrow
If you are young and buying a home for the first time, chances are you have a savings that is sufficient for a cash deposit very small. Some have parents who can help but if not, there are other options. If you have already saved a long time and can pay the entire cash contribution with your savings, this can be a perfect alternative. However, it is best if you do not use everything you have saved together.
Something predictable may happen and you may need the money in your savings account. There are some who have invested their savings in stocks or funds and then it can be difficult to withdraw them without losing big on the deal.
If you have no savings or not enough
A private loan may be the solution for you. If you can pay part of the account deposit it is positive as your monthly cost will not be as high. Feel free to compare different lenders before you take out a private loan. Make sure you get the best interest rate and terms that suit you. In addition, make sure that you can pay the monthly cost on both the mortgage and your private loan and include any interest rate increases in the calculations.
The best way to find the perfect lender is to use a loan broker who does the job for you. Apart from the fact that there is less work for you, he can only do one credit report which can then be used by all lenders. Everything to improve the conditions for you.
Whether you pay everything with your savings or if you choose a private loan to invest in your home, it is important that there is a budget and that you can always pay at the end of the month.