10 golden rules for drafting a property budget
By its nature, your real estate project is a long-term one. That means your budget should also be drafted from a long-term perspective. It is a good idea, in other words, to take the time to work out a balanced and realistic budget that does not force you to make too many financial sacrifices. Our 10 golden rules will help you on your way!
1. Identify your financial resources
Make a comprehensive assessment of your financial resources (savings, investments, help from your parents, etc.) and decide how much of this you want to devote to your real estate project. Is your start-up investment limited? Do not give up just yet. Your contact at ING can help find the best package for you.
2. Determine your borrowing capacity
Work out the amount you are able to spend each month on loan repayments, taking your income and expenditure into account. Not just today but also in the future, based on how your work and family circumstances will evolve.
3. Take additional costs into account
The total cost of your real estate project is not limited to the purchase price of your property. Do not forget to include the various other costs associated with your project: notary fees, bank charges, valuation fees, potential renovation works, etc.
4. Calculate your monthly payments
Use our simulator to get an idea of how much you will have to repay each month on the basis of our various loan packages. Depending on the package you choose, your monthly payments may be fixed or variable.
5. Include any renovation works in your budget
Are you already thinking about carrying out works on your property? Be sure to include this cost in your home loan application or set aside your own funds to finance it.
6. Think about other associated costs
As a property owner, you will have various costs to pay in the form of recurring charges, maintenance costs, redecoration costs, repairs, local taxes, withholding tax, etc. It is a good idea to consider these now so you can properly manage them in the future!
7. Take advantage of tax benefits
In certain cases, your home loan will entitle you to certain tax benefits. These benefits vary, depending on each individual's personal situation. They should therefore be examined on a case-by-case basis.
8. Do not forget government subsidies
Depending on the area in which you will be living, you may be entitled to financial allowances or subsidies for the construction, renovation or purchase of your home.
9. Protect your real estate project
Both your home and your family are very dear to you. So be sure to get the best possible protection for them. There are 2 kinds of insurance that are essential for your peace of mind: loan protection insurance and home insurance. You should include these premiums in your budget and take advantage of the free insurance provided by the Walloon Region (FR) and the Flemish Region (FR) against loss of income.
10. Build up a reserve
To avoid financial difficulties, it is essential to build up a reserve of funds you can call on in hard times. A good rule of thumb is the equivalent of 6 monthly repayments of your home loan. In the case of more serious difficulties, do not hesitate to discuss them as soon as possible with an ING adviser.