Buying a home and mortgages are associated with a lot of difficult terms, and sometimes you need to be an economist to understand them properly.
We grabbed the bull by the horns and compiled a glossary of common mortgage and home purchase terms with explanations!
Mortgage Interest Deduction
The tax benefit of interest paid on a mortgage. Primarily, the mortgage interest rate deduction is deducted from capital income, but if it is not, the deduction is from income income as a deficit credit.
Annuity Loan: An annuity loan is repaid in equal installments. However, if the interest rate of the loan changes, the monthly installment of the loan will change and the loan period will remain unchanged. Initially, loan repayment consists mainly of interest on the loan. At the end of the loan period, the share of loan capital in the amount of repayments will increase.
ASP: The abbreviation ASP comes from the word “home savings premium”. An ASP account is an account for first-time buyers between the ages of 18 and 39, with a 1% annual tax-free deposit. The account should save 10% of the cost of the home, after which the bank will grant the loan to the missing 90%. After the mortgages, the bank pays an additional tax-free additional interest on the savings, the amount of the additional interest varies from 2 to 4% depending on the bank.
(also known as co-ownership dwellings): A form of dwelling where the tenant buys the right to dwell in the dwelling. The cost of the right of occupation is 15% of the total cost of construction. In addition, the tenant pays a monthly rent for the apartment, just as a regular tenant would do. The right of residence is in principle of a lifetime nature and cannot be terminated except in exceptional circumstances.
When an apartment is located in a housing association, each apartment in a housing association is a housing stock. Owning a housing share entitles you to live in that apartment.
Housing company: Housing company. Usually a housing association owns an apartment block, terraced house or semi-detached house whose apartments it can sell or rent.