Mortgage offers: what should you pay attention to?
After opting for a mortgage that suits you, you will receive a mortgage offer containing a quote from the lender. It’s a significant next step on the way to owning your home. Once you agree with the mortgage offer and have signed it, the mortgage offer is legally binding. It is, therefore, essential to read through the mortgage offer carefully. What should you pay attention to, and what does the offer contain? We’ll list all of these for you below.
Applying for a mortgage offer
Before you receive the binding mortgage offer, you will first receive an interest rate offer, which is a kind of concept of the mortgage offer. If you’re in agreement with this interest rate offer, then the next step is to provide all the documents that are needed in MyViisi, after which you will receive the final mortgage offer from the lender once all the documents have been approved.
What is included in a mortgage offer?
The mortgage offer is a key step towards taking out a mortgage. You will receive it from the lender after you have applied for the mortgage. The lender’s offer will include the following:
- The interest rate
- The total loan amount
- The agreed length of time applicable to the mortgage
- The mortgage type
- The time within which you need to sign the mortgage offer
- The latest date on which you must appear before the notary to sign the mortgage deed
- Possible other additions: National Mortgage Guarantee (NHG)
- Possible other additions: renewal and cancellation costs
Extending a mortgage offer
Is the date of completion later than the latest date you are required to sign the mortgage deed by? Sometimes things work out differently than planned, resulting in a delay of the completion on a property. With some lenders, you can extend the mortgage offer by a number of months. You will sometimes pay extension costs for this, the so-called commitment fee.
There are also mortgage providers where you can opt for a longer mortgage offer period. If you already know that the date of completion will be later, you can take this into account in the expiry date of the mortgage offer. Discover what else you should pay attention to with a mortgage offer.
What does a mortgage offer cancellation cost?
Once you have signed an offer, it is legally binding. If you nevertheless want to extract yourself from the mortgage offer, you will need to cancel it. Often there are cancellation costs involved. This is a fixed amount of, for example, € 500 or € 750, or a percentage of 1% of the mortgage sum. The extent of the amount you will be charged varies per lender. A number of lenders will extend the mortgage offer free of charge.
The mortgage offer has been signed, so what’s next?
Have you just signed the mortgage offer? Well, congratulations! So, what’s next?
- The lender will process the mortgage offer and inform the notary that the money can be requested.
- The notary will then draw up the draft of the mortgage deed, the draft of the deed of conveyance (when purchasing a home) and the bill of settlement. You will usually receive the documents within one week before the date of transfer. Of course, you can also contact the notary yourself to confirm and prepare for the appointment.
Good to know: when taking out a mortgage loan, you give the lender the right of mortgage on the property. This means that if, for example, you do not pay the interest and/or repayment, the lender can repossess/sell the property. Of course, we’re assuming that’s not the case – but it’s always good to know what kind of commitment you’re entering into.
Need some help?
Our mortgage advisors are happy to help you check the mortgage offer. Of course, we are also happy to explain the exact meaning of each aspect of the mortgage offer. Feel free to schedule an appointment with one of our advisors.