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Loan quotes and why is it important?

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Loan quotes and why is it important?

26/04/2023 eurofinco Comments Off

What is loan-to-value and why is it important?

Loan-to-value is a term used to denote the percentage of the total value of a home financed by a loan. It is calculated by dividing the amount of the loan by the value of the property. For example, if you buy a €300,000 home in Ghent and you borrow €240,000, the quotity of your loan will be 80%.

But why is loan quantity important? Well, it affects several aspects of your loan, including the interest rate and the loan amount.


How the quotient of a loan can affect the interest rate?

In general, the higher the quotity of a loan, the more risk the lender takes, and the higher the interest rate will be offered to the customer. This is because a higher quote means that the lender has to finance a greater proportion of the value of the property, resulting in a higher risk. This can result in you paying more in interest over the entire term of the loan.


How the quota of a loan can affect the loan amount?

A higher quota may also mean that you can get a lower loan amount than you originally wanted, because lenders usually put a limit on the percentage of the value of the home they are willing to finance. For example, if the lender is willing to finance a maximum of 80% of the home's value and your loan quantity is 85%, you will have to make up the difference from your own funds.


Why a low quota can be beneficial?

Therefore, it can be beneficial to have a low-quantity loan, as this can result in a lower interest rate and a higher loan amount. This can be especially important if you have already had to spend a large sum of money to buy the property, and you do not have extra money available to pay a higher interest rate.


How can you creatively manage and influence quotity?

Because some people (young and old) already own a property. The full situation can be mapped out, as it is the case that there is often a surplus value on an existing property. You can take this surplus value with you on your new purchase, the only condition is that this property is in Belgium. We then speak of a global quotation in a file.
Young people can also use the parents' home and still get better terms from the bank.
In a blog post, we unfortunately cannot go into full detail, but we do this for all our customers.



It is therefore advisable to make a proper calculation of your financial situation before taking out a loan, so that you can obtain a loan with the best possible terms and rates. Eurofinco (Zele), can help you find the best loan that suits your situation and your needs. It is important to understand the quotity of the loan, as this is 1 of the important pillars in a home loan file.

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