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The financial crisis – newspapers, radios, and televisions talk about it every day. You hardly pay attention to it, yet it affects your daily life. The latest measures by the Belgian government to meet the targets for reducing public deficits on sovereign debts are a striking example.

Recession or economic recovery? It seems that we are currently at a turning point, and the situations differ both in Europe and the United States. Why? This is what we will briefly discuss for you today.

Recession hits Europe

The countries of the European Union are bogged down by unsustainable amounts of sovereign debt in the long term. Governments are now paying for the budgetary laxity that has taken hold over the years. In short, our states have been living on credit for years, but today their debt is such that no one wants to lend them money anymore, except at high rates.

To cure the patient, Europe has imposed on member states not to exceed an annual public deficit of more than 3% of GDP. To achieve this goal, governments must cut public spending but also increase their revenues. These are the famous austerity measures that are hitting everywhere in Europe.

The corollary of this fiscal purge is stagnant growth and a catastrophic recession. Is austerity a cure-all or a deadly poison?

Uncle Sam’s money printing factory

In the United States, things are never done the same way as elsewhere. While the US public deficit reaches 120% of GDP, nearly $16.5 trillion, Republicans do not want to cut public spending or increase taxes, total liberalism obliges. President Obama is doing what he can to convince the Senate, but tax increases are still seen as a scarecrow in the United States. As a result, when the US runs out of money, they print more to support economic activity.

This suicidal policy has the positive effect of maintaining economic activity, but it is not sustainable in the long term. The upcoming debates in the United States will focus on reducing the public deficit.

Current developments in Europe

The situation in Europe seems to be positive. Europe appears to have avoided the bankruptcy of several states, and austerity measures allow states to more or less meet European targets. However, this fiscal arsenal seriously threatens household consumption, and recession sets in with the additional danger of reducing tax revenues, the perfect counterproductive effect.

Current developments in the United States

The United States will not escape reducing its abysmal deficit. The upcoming debates will be stormy but vital to the survival of the world’s largest economy. Economic activity is therefore inexorably bound to slow down in the United States in the very short term.

Many people decide to apply for several loans to ensure the payment of various costly activities, such as buying a house or a motor vehicle and preparing for a wedding. However, managing the repayment of different loans is not the simplest situation and sometimes leads to many inconveniences. Fortunately, there is a much more advantageous solution: credit consolidation.

What are the disadvantages of having multiple loans?

Having different loans means multiple interlocutors and, inevitably, various contracts to sign; not to mention several premiums to pay monthly. Consequently, managing these different administrative elements can often be complicated. Moreover, the accumulation of various premiums can quickly constitute a very high amount, sometimes difficult to pay.

What is revolving credit?

Linked to a credit card, revolving credit constitutes a cash reserve whose amount varies depending on the cardholder and their needs. This type of loan is repaid based on the amount spent using this card.

At first glance, this borrowing technique seems advantageous and interesting. Unfortunately, it often proves to be quite misleading. Indeed, managing your money properly becomes more difficult as it is possible to spend a lot. Repaying the multiple monthly payments, which are sometimes very costly, can therefore be burdensome.

Why opt for credit consolidation?

Credit consolidation offers many significant advantages! With a single contract and interlocutor, your administrative management becomes much simpler. Moreover, you only have to pay one premium per month, which is lower compared to the sum of several loans. Indeed, these loans can be consolidated into a single mortgage, provided there was already one. Another alternative is to establish an installment loan with the various credits. The amount to be paid becomes larger, the interest rates are lower, and the monthly payment is less expensive.

Do you have multiple ongoing loans? Let’s say you have taken out auto financing for a purchase of €25,000; you also have an installment loan of €10,000 with which you did some renovations in your house; finally, you have contracted a revolving credit (a credit line) of €3,000 in a large store to buy high-tech products (tablets, computers, printers, smartphones, iPhones, etc.).

You realize today that the accumulation of your three separate monthly payments is starting to strain your monthly budget and that the ends of the month are becoming difficult.

Rather than dragging on with monthly repayment difficulties, it might be time to think about finding a solution: consolidating your three loans into a single loan can certainly reduce your new monthly premium. A few words of explanation.

What is credit consolidation?

Credit consolidation aims to perform a credit grouping. In the example mentioned below, you have three separate monthly payments to make. By consolidating the three outstanding loan balances, you will only have one loan with a significantly lower monthly payment.

What are the benefits?

Firstly, from an administrative point of view, you no longer have to think about paying your three premiums each month to different interlocutors. With credit consolidation, you only have one ongoing loan and one interlocutor.

Secondly, it is obvious that the accumulation of three separate premiums resulted in much higher repayments than if you only had one ongoing loan, even if the amount of this loan is higher.

When should you proceed with the consolidation of your loans?

As soon as you have more than one ongoing loan, it can become interesting to proceed with a credit consolidation. This is a possibility that you should consider with your broker.

Obstacle to credit consolidation

It will be difficult to proceed with a credit consolidation if you are listed with the National Bank of Belgium, meaning if your file has fallen into litigation.

Solution?

If you own a property that is free of charges, it can always be considered to take out a homeowner loan and take a new mortgage registration on your property.

Let’s study a textbook case today: three years ago, you took out a mortgage of €200,000 to buy your house. The execution of your contract is going smoothly, and you are repaying your monthly premium without any delay. Today, you are considering doing new work on your house and need to borrow an additional sum of €50,000.

Of course, you cannot offer any other guarantees than your house, which is already mortgaged by the first loan.

What is the most interesting solution for you: constituting a second mortgage or buying back your first loan and adding an additional sum of €50,000 guaranteed by the first mortgage?

Let’s examine this recurring question.

Constituting a mortgage involves costs

When you buy real estate, you will often be asked to agree to a mortgage. Often, this guarantee will be a sine qua non condition for obtaining your loan.

Constituting a mortgage involves significant costs that will be added to the purchase price of your house.

Buying back a mortgage is the most advantageous solution

If during the life of your mortgage, you need to borrow new sums of money, for example, to carry out work on your house, it will always be more advantageous to buy back your mortgage, increase it by the new desired amounts, and keep the existing mortgage rather than agreeing to the constitution of a new mortgage, which would incur new costs.

In such a situation, consult your usual broker who will analyze your situation and advise you in the best possible way.

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:

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.
If you notice a significant decrease in interest rates in the market and you believe that your initial interest rate is too high.
If you took out a mortgage with a variable initial interest rate and the rates on the mortgage market are falling.
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:

The release of the original mortgage registration that burdens the original mortgage;
The new application fees for the constitution of a new mortgage;
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?

Provision on real estate purchase agreement 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.

You often see zero-interest credit in some stores or advertisements. What is it? Should you be wary of it? Let’s take a closer look at this question.

1. Who offers zero-interest credit?

These are generally favors granted by supermarkets or large stores that have noticed their customers are more inclined to buy certain everyday consumer products when the price is spread over several months.

2. For what types of products?

These are loans granted by large stores to promote the purchase of everyday consumer products such as hi-fi, household appliances, telephony, or internet… etc…

3. Characteristics

These are loans granted for relatively modest amounts and which run over very short periods (a few months).

4. Crédit Populaire Européen

Our brokerage company and most credit intermediaries and banks do not offer zero-interest loans. However, do not hesitate to check our advantageous interest rate loans in the credit solution section of our website.

The nice weather is here, and with it comes the desire to renovate and do some work on your house. Take advantage of it to bring more comfort to your whole family. Why not install a veranda in your garden or transform your garden? Discover the ideal solution with the renovation loan and how to finance the work.

Doing some work, arranging your attic to add a quieter living space in your house. Changing the frames or installing double glazing to save on your heating oil bill…

Who can get a renovation loan?

Only homeowners can get a renovation loan. A tenant cannot take out a loan under the preferential conditions of the renovation loan. They will need to take out a personal loan or a classic installment loan.

What are the conditions for getting a renovation loan?

Be the owner of the house;
Provide a signed quote from both parties (the contractor and the owner);
If no quote is available, provide the invoice for the work;
The quote must cover at least 80% of the amount borrowed;
Identity card;
Last three pay slips;
Bank statements where the salary is deposited;
Property title of the house;
Loan in both names for married people.

Is there a maximum borrowing limit?

No, it will all depend on your contributive capacity.

Installment Loan or Mortgage Loan?

In terms of renovation loans, this is an important question often asked: which is the most interesting formula: the installment loan or the mortgage loan?

Generally, the installment loan will be the winning formula. Indeed, the mortgage loan involves costs, and even if the rates are lower in a mortgage loan (3.5%), the costs incurred by the mortgage loan will negate this advantage. The rates in installment loans are around 7%, so it is only if you plan to borrow a very large amount (more than €50,000) that the mortgage loan becomes interesting.

The mortgage loan will be the solution for the borrower who cannot offer other sufficient guarantees (for example, if the salary amount is too low or if there are already other ongoing loans).

Are the costs of a mortgage loan significant?

When buying your house, the financial institution will establish a mortgage guarantee. This guarantee will incur four types of costs: loan deed fees, notary fees, registration tax to the registration administration, and VAT.

When your initial mortgage is already well repaid, you can again take out a mortgage loan to carry out the work. In this case, the costs will be lower. They will only include two types of costs: loan deed fees and notary fees.

Therefore, to know exactly which of the two formulas is the most interesting for you, you will need to ask one of our brokers to analyze your file. Let’s say that below €25,000 and unless you have no other solution, you should favor the installment loan.

And don’t forget…

Finally, with the pace at which raw materials are running out and considering the frantic increase in energy prices.

Doing insulation work, for example, means reducing your energy bills. The same goes when you buy a refrigerator or a dishwasher from the higher range, which will consume much less electricity. In the long run, you will win and contribute to the ecological effort. With Cpe you benefit from advantageous rates, apply for your loan online.

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.