The financial crisis has hit Europe since 2008 following the consequences of the subprime crisis in the United States. The countries of the European Union have become aware of their significant debt and have decided to reduce their public deficit (i.e., the gap between public revenues and public spending). In summary, the member states of the union must save money. What does a mortgage refinancing cost?

It has not escaped anyone’s notice that this situation has led to an increase in tax pressure in Europe and a significant reduction in public spending. In short, household purchasing power has been continuously under attack from governments for months (for example, the French Government hopes to raise new taxes during the 2013 fiscal year for no less than 20 billion euros).

In this context of drastic reduction in household purchasing power, it may be interesting to consider refinancing your mortgage with the reasonable aim of reducing the monthly expenses that weigh on the household.

Can you refinance your mortgage?

The answer to this question is certainly positive. You always have the option to refinance your mortgage.

When is it beneficial to refinance your mortgage?

Essentially in 4 specific situations:

1. When you have significant work to do in your house and need new financing. The most natural solution will be to add a supplement to your original mortgage and thus refinance your original mortgage to have only one that encompasses the initial purchase cost of the house and the cost of the new work.
2. If you notice a significant decrease in interest rates in the market and you believe that your initial interest rate is too high.
3. If you took out a mortgage with a variable initial interest rate and the rates on the mortgage market are falling.
4. If you have multiple loans or installment plans in progress and you find that the total monthly payments are too high. In this case, it will probably be wise to proceed with a credit consolidation or centralization of your loans to have only one monthly payment. In this case, your house is used as collateral for a mortgage. The repayment periods will be extended, which will result in a reduction of the total monthly repayment burden.

What is the cost of refinancing a mortgage?

The cost of refinancing a mortgage depends on the amount of the new mortgage loan.

There will be a cost related to:

1. The release of the original mortgage registration that burdens the original mortgage;
2. The new application fees for the constitution of a new mortgage;
3. The new fees for the registration of the new mortgage.

How do I know if it is in my interest to refinance my mortgage?

This question requires a thorough analysis by a professional who will study your file on a case-by-case basis. In a schematic way, we can say that when you can lower your monthly expenses through a mortgage refinancing, you should consider the opportunity to proceed with it.

At Crédit Populaire Européen, our specialized brokers are at your disposal to examine this question with you free of charge.

Buying a property involves significant costs, so most Belgians are forced to apply for a mortgage. Nowadays, investing in a house is a wise decision. Indeed, the reason for this timely investment is partly due to the instability and unpredictability of various market stocks and bonds. Provision on real estate purchase agreement.

For example, since 1980, there has been a 10% annual increase in real estate value. Additionally, and historically speaking, interest rates in this area have never been as low as they are currently, with values around 3%. Thus, real estate represents a stable and lucrative investment in the Belgian market.

What is the 10% down payment?

In order to acquire a property, it is imperative to pay the notary a deposit equivalent to 10% of the total purchase value; this is to reserve the property and prevent its sale to another buyer during the time needed to secure a mortgage. These steps take some time before obtaining a bank’s approval, usually about a month.

What are the ordinary mortgage and the 125% mortgage?

The normal mortgage and the 125% mortgage are currently the only two mortgage loan options available. The 125% mortgage was introduced to help people with financial difficulties. It is not easy to cover the deposit for the property in cash to secure its reservation. Thus, the 125% mortgage is established as an ordinary loan for the total purchase price of the property, including the down payment. Additionally, it covers credit deed fees and notary fees. However, if this option is chosen, the interest rates will be slightly higher.

One notary or multiple notaries?

An authentic deed passed before a notary is mandatory in a real estate sale. Generally, the real estate transaction only requires the presence of one notary. Consequently, the buyer and seller’s opinions do not diverge regarding the choice of the notary for the authentic deed. Furthermore, both the buyer and seller agree to go to the notary’s office where the property is being sold.

In other cases, the buyer and seller may have multiple notaries. This solution presents no problem as notary fees are not doubled. Indeed, a law provides for the division of these fees in case of multiple notaries. Therefore, this option is not more expensive than the first.

What are the costs involved in buying a property?

Buying a property involves notary fees and credit deed fees. Notary fees consist of the purchase price of the property and registration fees, i.e., taxes imposed by the state when the notary deed of purchase is registered. These fees vary according to the sale price of the property, the region, and the cadastral income. Additionally, notary fees include the notary’s fees, which are assessed based on the value of the property and the amount of credit deed fees. These fees complete the total cost of notary fees, are associated with the mortgage necessary for the property purchase, and are registered at the mortgage office.

As for the credit deed fees, they are lower than the notary fees.

Simulate your costs…

To help you with your steps, Crédit Populaire Européen offers the possibility to simulate your costs to give you an idea of the total cost of the real estate transaction. Our website includes two simulators: one calculating the credit deed fees, the other evaluating the sales deed fees. However, note that these calculations are indicative and other elements may modify the final amount.

Regarding credit deed fees, simply indicate the amount of the loan. The simulator will evaluate the principal amount, accessories, registration fees, mortgage registration fees, and notary fees.

As for the sales deed fee simulator, it is possible to get a reduction on the registration fees if the house to be acquired is modest (depending on the cadastral income and the number of children).

Did you know that the Walloon Region offers a whole series of grants and benefits in the field of real estate? What are the regulations of the Walloon Region regarding mortgage loans? Discover the information about the Walloon Region Grant. Here is a brief overview:

1. Benefit from a Walloon Region Grant for the purchase of a property belonging to the public sector

The acquisition grant is a financial aid of €745 granted by the Walloon Region, under certain conditions, to people who purchase a property, either privately or through public sale, that belongs to the public sector. This includes, for example, a house sold by a social housing company, a municipality, a CPAS, the Post Office, or the SNCB.

If you obtain the acquisition grant, you will also benefit from a reduction in registration fees to 0%.

If you buy an improvable property, in addition to the acquisition grant, you can apply for a rehabilitation grant (without the increase provided for the purchase of the property to be rehabilitated).

2. Benefit from free insurance for the repayment of a mortgage loan in case of loss of income

Wallonia subscribes for you and at its expense to this insurance against loss of income, which allows for the partial repayment of your mortgage loan if you lose your job or are unable to work. You can benefit from it if you take out a mortgage loan to buy, build, rehabilitate, or restructure your home, under certain conditions.

3. Finance the renovation/purchase/construction of my home with advantageous rates/conditions through a social credit organization

Low-interest loans are granted under certain conditions by the Walloon Social Credit Society. The conditions and types of beneficiaries are described by the Walloon Social Credit Society.

4. If you have a large family, finance the renovation/purchase/construction of your home with advantageous rates/conditions

The Housing Fund for Large Families of Wallonia helps large families realize the renovation of their home by granting low-interest loans.

5. Obtain a mortgage or additional loan granted by my province

Certain provinces grant advantageous loans or additional loans.

6. Obtain a mortgage thanks to the guarantee of Wallonia for its repayment

The objective is to allow borrowers who do not have sufficient personal funds to still benefit from a loan. Wallonia then undertakes to cover the loss suffered by the lending institution on the part of the loan exceeding 70% of the market value of the property.

7. Benefit from the possibility of buying social housing

This concerns properties sold by the Walloon Housing Society (SWL) under social conditions for low-income people.

The mortgage loan is amortized like all other forms of credit. The bank generally leaves the borrower the choice of the repayment formula best suited to their situation.

The question of which type of amortization to adopt depends on a good understanding of what is meant by amortization and what it entails.

Definition

The amortization of a mortgage loan corresponds to the repayment of the borrowed capital. To avoid any confusion, it should be clarified that a loan consists of two different realities. On one side, there is the amount requested by the borrower, which is the subject of the loan, i.e., the capital, and on the other, the interest collected by the bank in return for its services.

There are situations where the amortization of the mortgage loan allows for a tax deduction. It is advisable to inquire about the required conditions.

What is an amortization plan?

When concluding a mortgage loan contract, such as real estate solutions, the financial institution and the borrower agree on a repayment plan, which includes elements such as monthly payments and the repayment period. A repayment schedule is then drawn up in concert.

This is an amortization plan whose objective is to precisely indicate how the loan will be repaid and the amount of each monthly payment.

What are the different types?

There are 3 possible types of mortgage loan amortization:

• The first consists of making a regular repayment of constant monthly payments. During the initial period, the interest portion of this amount will be more substantial compared to the capital. At the end of the contract, it will be the opposite since there will be more capital than interest in each payment.
• The mortgage loan can also be amortized in a way that the total interest is repaid throughout the term. Only at the end of the loan will the borrower repay the capital in full along with the interest corresponding to the last monthly payment.
• Another alternative consists of repaying a fixed amount of capital in each monthly payment. The capital portion to be included in the payment will be calculated by simply dividing the capital by the number of months relative to the amortization. As for the interest, it will be repaid in a decreasing manner as the contract progresses towards its term.

Which solution should you choose? This question is not simple, and the final choice generally depends on the duration and the amount borrowed. It is therefore always preferable to contact a specialist to get the appropriate answer for your situation.

The financial crisis that has gripped Europe since 2008 can also have positive aspects. In fact, in terms of mortgage loans, banks are competing with each other to make the mortgage market as attractive as possible: in this regard, interest rates have never been so low and loan terms have never been so long.
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The latest innovation: special “Young” conditions, here’s a quick overview.

Concretely: what are my advantages?

Mortgage loans intended for young people offer even lower interest rates than ordinary mortgage market rates and, above all, allow you to pay off your entire mortgage, including fees.

Until what age?

These advantageous conditions start at the age of 18 and apply until the age of 40.

The duration of my mortgage loan

The term of your mortgage loan can be up to 30 years.

And that’s not all: €50 discount during the first 8 months!

When it comes to mortgage loans, always inquire about the grants and advantages granted by the public authorities.

Thus, if you are under 35 and under certain conditions, the Walloon Region grants you a subsidy of €50 per month on your monthly payment for the first 8 months. Find out more!

From 17.02 to 25.02.24, Batibouw, the renovation and construction fair, will be held. Real estate remains a safe investment in Belgium given the upward trend in market values. It is always a useful and profitable investment for Belgians. In this article, we provide some useful tips to best prepare your mortgage loan application.

What are the key elements to prepare your mortgage loan application?

Our credit brokers have nearly 20 years of experience in the mortgage market. Our goal is to analyze your application to offer you a solution in which you will feel comfortable for a period of 15 to 25 years. Indeed, it is important to remember that a mortgage loan is repaid over a long period. Therefore, it is crucial to choose a viable long-term solution so that you feel confident about the upcoming repayments.

The elements to consider are as follows:

• The amount, nature, and stability of your income;
• A statement from the National Bank of Belgium indicating that you are not listed for unpaid credit disputes;
• Your age as well as the amount and duration of the desired loan;
• Details of all your fixed expenses (other loans, for example);
• The cost of the property in relation to your financial profile;
• The personal funds you can contribute.

Are there different types of mortgage loans?

Indeed, in addition to the purchase of a property, the buyer must bear various additional costs. We are obviously referring to the credit deed costs and the unavoidable notary fees.

Thus, it is generally required for potential buyers to have personal funds to cover these costs. Indeed, the bank tends to only grant a loan corresponding to the market value of the property.

Reduction of registration fees for modest properties

There is a possibility to reduce your incidental costs. The law offers the possibility to reduce notary fees when buying your first house if it is a modest dwelling. The normal registration fee rate (12.5% or 10%) can be reduced to 6% or 5%.

The first condition to benefit from the fee reduction is to have a cadastral income of a maximum of €745. If this cadastral income is €746, the buyer will pay 12.5%.

This ceiling of €745 can, however, be increased for large families. It will be raised to:

• €845 for the buyer who has three or four dependent children,
• €945 if they have five or six dependent children,
• €1,045 if they have seven or more dependent children.

Our next articles will cover real estate taxation and the reduction of property tax (cadastral income)

How will the renovation of my house and its financing proceed? A mortgage loan is a loan granted by a credit institution, usually a bank, which involves a mortgage registration on a property owned by the borrower or one of the co-borrowers to guarantee the lender against a possible default in payment.

The mortgage loan contract must be signed in front of a notary and entails specific fees.

What is a mortgage loan for?

Generally, when we talk about a mortgage loan, we quickly think of buying a house or a property (building, land, etc.). This type of allocation represents a large part of the mortgage loan, but it’s not the only one, far from it. Thus, a mortgage loan can allow a person to borrow an amount of money that is not used to buy a house but for any other type of operation.

Resorting to a mortgage loan results from the fact that the borrower has no other guarantee than their house and therefore cannot obtain conventional financing like a personal loan.

The mortgage loan to finance my renovations

Thus, the mortgage loan can perfectly serve to carry out renovations in your house. In this regard, it is necessary to distinguish between:

• Renovations requiring a building permit: in this case, the borrower must submit their building permit and the specifications drawn up by the architect to apply for the mortgage loan. The release of funds will be done in successive waves. The borrower must provide the invoices for the work or a certificate from the architect proving the progress of the work.
• Renovations not requiring a building permit: in this case, the borrower must provide the quote(s) for the work to submit their loan application. The release of funds will also be done in successive waves upon the production of the invoices for the work.

The benefits of CPE

Our company has been present in this market since 1996. Our specialists take the time to analyze your file and offer you the solution that suits your profile. We will give you a preliminary answer to your request within 48 hours, subject to the perfect accuracy of the information provided. Find more info on our mortgage loan solutions.

Do you want to acquire a property, a plot of land, carry out work or renovate your house? Now is the time, don’t hesitate, mortgage interest rates have never been so low on the market. Fixed rate or variable rate? This is the question you will inevitably ask yourself. The answer in a few lines.

Fixed rate or variable rate?

For several months, interest rates have been so low that we can only advise you to take out a mortgage with a fixed rate.

Why are interest rates so low?

The financial crisis has a lasting impact on Europe, and banks have no choice but to offer very low rates if they want to revive credit activity.

Why choose a fixed rate?

Mortgage interest rates are so low that the trend for the coming years can only be upwards. So, if you take out a mortgage with a very low variable rate today, this rate will likely only rise in the coming years. Don’t forget that a mortgage can last 25 years and sometimes even 30 years. Over such a period, many events can occur. Therefore, if you have the assurance today of securing a low fixed rate for the next 25 years, why deprive yourself of such security?

When to choose a variable rate?

A variable rate mortgage is very interesting when interest rates are high at the time of your mortgage loan. In this scenario, you might think that interest rates will vary downwards in the coming years, which is not the case at the moment.

What makes interest rates vary?

Interest rates are set by the National Bank of Belgium based on the state of public finances. Today, public finances are not in good shape in Belgium, but paradoxically, it borrows at very low rates on the markets (sometimes even negative, which is a historical first). Why? Because the market estimates that Belgium’s finances are among the best in Europe and that Belgium offers significant solvency guarantees, particularly thanks to a very high savings rate.

When is it interesting to refinance your mortgage?

You have taken out a fixed-rate mortgage and notice that interest rates are very low now. You would like to refinance your loan and benefit from a lower rate. This is possible. For mortgage refinancing to be worthwhile, we recommend waiting at least 7 years after signing your contract. You should also see a reduction in your interest rate of at least 1% to offset the notary fees and the cost of releasing the mortgage registration.

Nothing beats a detailed case-by-case analysis

In this matter, we can only advise you to make an appointment with our brokers and discuss your case in detail. There is no ready-made answer, but an analysis of your financial situation will allow us to find, together, the solution that suits your current situation.

Have you always dreamed of buying a nice little house or a beautiful apartment in a sunny country? Are you particularly fed up with the gloomy Belgian weather and its rampant taxes? And what about real estate in Spain?

Well, guess what, you are not alone, and many of our fellow citizens and European neighbors think like you. What is this country where the weather is so beautiful, close to us, with a rich culture and one of the best cuisines, and which, as an added attraction, has an ultra-attractive real estate market compared to all its European neighbors? Well, it’s Spain Madre de Dios! So take the plunge and sing with us: “We will all go to Tore Moulinos“. Here’s an overview of your next move…

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The real estate crisis in Spain in a few figures

40%, yes, it’s 40% on average that the real estate market has lost since 2007 in Spain. Spanish banks that massively invested between 2002 and 2005 in real estate now find themselves with a real estate portfolio they no longer know what to do with.

To make matters worse for the Spanish citizen who is hit by an unprecedented crisis and cannot take advantage of it. Nearly 40% of young people under 28 are unemployed in Spain, and almost 20% of the active population is also unemployed.

A boon for the British, the French, the Russians and… the Belgians

22%, yes, 22% is the increase in real estate purchases in Spain between the second quarter of 2012 and the second quarter of 2013. So who are the Europeans taking the lion’s share? As usual, the British are keen (understandable given the salary levels in England and the dreadful weather there).

They represent 15% of real estate transactions; the French (looking for happiness elsewhere) account for 10% of buyers, the Russians (who have made it) represent 7.6%, and… the Belgians are in fourth place with 7.5% of purchases. For information, in 2007, the Belgians only represented 2% of purchases in 2007…

Proportionally, the Belgian appears to be the leading real estate investor in Spain, and they mostly buy second homes in the north and south of the Costa Brava (Alicante, Altea, Calpe) as well as on the Costa del Sol (Malaga, Marbella).

How to get a mortgage in Belgium to buy property in Spain?

Of course, if you want to acquire a property in Spain, you will – in the vast majority of cases – need to take out a mortgage.

At this stage, you will face a double difficulty:

Either you decide to take out your mortgage in Spain

In this case, you will have no difficulty with your mortgage, as long as you present a sufficient solvency situation. Indeed, the bank will take a mortgage on your property and will find sufficient guarantee in it. However, to take out a mortgage in Spain, you will need to be domiciled in Spain, which is not always desired by our fellow citizens.

Or you decide to take out your mortgage in Belgium

In this case, you will have no problem with domiciliation. However, you may encounter difficulty in constituting your mortgage. Indeed, no banking institution will want to take a mortgage on a property located in Spain. Indeed, the European agreements on assistance with recovery are not yet optimal, and this situation still creates many problems.

Therefore, the Belgian bank will want to take a mortgage on one of your properties located in Belgium. Consequently, this means that you must own a property in Belgium that is almost free of charges.

As the saying goes…

This attraction of Belgians to Spain seems to go hand in hand with a sharp drop in real estate transactions on the Belgian coast. A decline that real estate agents explain, among other things, by the increase in Belgian taxes on second homes, with many Belgian coastal municipalities having increased their municipal taxes.

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The same situation in France, where the taxation on second homes and the taxation of capital gains have literally driven away foreign investors.

Finally, it should be noted that Spain is not an isolated case, many French and Belgians are investing in… Morocco for similar reasons.

Are you considering buying a property? Do you have an idea of the price of the house you want to acquire, but do you have a precise idea of the costs surrounding a real estate purchase? Few people master this subject and prefer to ignore, in a way, this aspect of things. However, these costs can really affect your budget. You must take them into account and face your financial situation.
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Follow the guide, in this article we reveal the costs you wouldn’t want to see. Don’t forget that you can also find on our website real estate cost simulators that will give you precise figures depending on the region where you are and the amount of your purchase.

What are the costs that affect a real estate purchase?

Costs related to the purchase of a property:

1. The cost of possible works

Two situations may arise: either your future house requires renovations or repairs; or, after all, you want to make some improvements before moving in. The cost of works must therefore be taken into account.

2. Notary fees

Notary fees are of two kinds: the fees for the purchase deed of the house and the fees for the mortgage loan deed.

A. Purchase deed fees

• Registration fees

This is a tax set by law that the notary must pay to the state. The amount of these fees is a percentage of the purchase price of your property. They vary from one region to another. Consult a notary office to know your rate or surf our online simulator.

In the Walloon Region, the standard registration fee is 12.5% of the market value of the property.

Under certain conditions, it is possible to benefit from reduced rates:

• 6% of the purchase price (for modest houses under conditions)
• 1.50 or 0% (for housing sold by a public housing company)

• Notary fees

Notary fees are set by law. They are the same for all notaries in the country.

In the case of a sales deed, the fee is proportional to the value of the property: percentages are applied in tranches of the property’s value.

If several notaries are involved, this fee is divided between the notaries according to the work and responsibility of each, following the sharing rules established by the professional authorities.

So if you choose another notary to follow your purchase, it will not cost you anything. The “seller” notary and the “buyer” notary will share the fees between them.
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• Miscellaneous fees

The miscellaneous fees charged by the notary cover mortgage, urban planning, tax, and other legally required searches, stamp duty on the deed and its copy, deed transcription and mortgage registration fees, file fees, etc. They can vary between 650 and 1,250 euros.

B. Mortgage loan deed fees

Very often, money is borrowed to buy your home. This involves financing with a mortgage guarantee on the property.

This loan binds you to a credit institution. To obtain this loan, you must execute a new authentic deed with your notary: a mortgage loan deed, which will result in new fees.

The deed fees for your mortgage loan include 4 items:

Registration fee:

The registration fee represents a tax paid directly to the state by the notary for the registration of the deed: it is 1% of the loan amount.

The mortgage registration fee:

This fee is also a tax paid to the state by the notary during the registration of the deed at the mortgage registry. The fee is currently set at 0.30%, calculated on the loan amount.

Notary fee

The notary responsible for drafting the deed must calculate a fee, established based on the rate set by law. The amount of this fee will always be the same, regardless of the notary who drafted the deed.

Miscellaneous deed fees.

In addition to the fiscal fees and his fee, the notary will charge other fees required for drafting the deed (the cost of tax searches, mortgage certificates requested before and after the formalities, cadastral extracts, stamp duty, …).

3. Fees charged by the credit institution

These fees vary depending on the amount of your loan and the credit institution. They generally include fees for:

• property appraisal
• file processing.

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