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Increase mortgage

A homeowner in need of money quickly thinks of his home as a source of money. After all, he can get money by increasing the mortgage. It is a way of getting money 'out of the bricks'. In this way, money is made available for a renovation, a holiday home or a caravan.

Overvalue necessary

In order to get money out of the bricks, it has to be in there. There is only money 'in the bricks' if there is equity in the home. That means the house is worth more than the amount of the outstanding mortgage. The bank will not want to provide an additional mortgage if the house does not have sufficient value for this. After all: the mortgage security does not make much sense if the house does not yield enough upon sale to pay off the outstanding mortgage debt.

Private raise

An extra mortgage amount can be borrowed in two ways: with a private increase or with a second mortgage . If a private raise is possible, it is preferable. Then you do not have to go to the civil-law notary for a new mortgage deed. You are therefore cheaper.

A private increase of the mortgage is possible if the mortgage registration is high enough for this. The registration is the amount for which the mortgage is recorded in the Land Registry at the time of closing. If a higher registration was chosen at the time, a higher amount was set than the mortgage that was taken out at that time. It may also be the case that a considerable amount has already been paid off since the mortgage was taken out. The space between the registration and the outstanding mortgage can be used for a private increase.

Assessment as a new mortgage

For the bank, increasing a mortgage is the same as taking out a new mortgage. The application is assessed in the same way. The value of the home must be demonstrated with a valuation report. The income must also be demonstrated again. All documents are viewed as if it were a new mortgage, the application must meet all current requirements.

Tax deduction for mortgage interest

Whether the mortgage interest that will be paid on the increase is tax-deductible depends first of all on the spending purpose. Will the money be spent on renovating your own home? In that case, the interest falls under the mortgage interest deduction if the loan meets the conditions for tax deduction. Will it be used to buy a holiday home or a caravan? Then the interest is not tax deductible.

Alternative: consumer credit

Is there no equity in your home? Then it may be possible to take out a consumer credit to realize your wish. A personal loan, for example, or a revolving credit . In some situations this is even more favorable if an increase in the mortgage is possible. After all, when taking out a mortgage, costs are involved that are not an issue with a personal loan. Even if there are no notary fees for a private raise, you do pay consultancy costs and appraisal costs. The mortgage interest is lower than the loan interest. However, especially at lower loan amounts, the costs are not compensated by the difference in interest.

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