Prospectus

Mortgage loans

Prospectus for Mortgage Loans 120/1217 Conditions valid from December 13, 2017

These credits are subject to the Belgian commercial code in Book VII,Title 4, Chapter 2.

Table of contentsIntroduction 5

Six key questions 61. What is a mortgage loan? 62. What is a mortgage guarantee? 63. Why take out a mortgage loan? 64. Why use a credit? 65. Who can take out a mortgage loan? 66. How much can you borrow? 7

The mortgage loan in detail 8The List of Mortgage Loan Rates for private use 8The different rate formulas 9The determination of the interest rate 10The lifetime 10The various credits 11When do you receive the amount borrowed? 12Simplify your life with our online mortgage loan simulator 13

How do you buy your property? 14Outright sale 14Public auction 16

What additional costs will your project incur? 18Costs associated with the purchase of a property 18Costs associated with your mortgage loan 19

Protect your family and your investment 20Life insurance 20Property insurance 20

Possible costs during the credit 21Non-drawdown fee 21Costs for the change of the contract 21Costs for the early repayment of your mortgage loan 21Cost of a mortgage transfer 21Costs for the cancellation of the mortgage 21The charges in case of non-payment 21

Definitions 22

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Introduction

Do you have plans to buy, build or renovate a house or an apartment? As a main residence or second home? Such a nice project will of course be an important milestone in your life. Nagelmackers would like to help and advise you on how to arrange everything as well as possible: we can put all our experience in wealth creation, management and protection at your service. You can count on our staff and their professionalism. They take the time to answer your questions, look into your personal situation and goals and offer you the credit formula that suits you best.

In this prospectus you will find all the essential information on mortgage loans. Your Nagelmackers adviser can suggest and propose a tailor-made solution.

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Six key questions

1. What is a mortgage loan?

A mortgage loan is intended to finance the purchase, construction or major renovation of the property, primarily for private use.

2. What is a mortgage guarantee?

In most cases, a mortgage loan is accompanied by a mortgage guarantee. There are three types of mortgage guarantees. In each of these cases, the guarantee is granted by the owner of the property.

• The mortgage registration: the mortgage is drawn up at the notary with a deed and registered in the records of the office of conser-vation of mortgages. With this guarantee the owner gives the bank the ability to sell the mortgaged property if he, even after registered reminders, fails to repay his loan. A mortgage registration is always taken for 30 years.

• The mortgage mandate is also prepared at the notary with an authentic deed. The owner gives his unconditional approval for a mortgage on the property as soon as the bank deems it necessary.

• The mortgage promise is arranged through a private contract. This guarantee therefore does not require the intervention of a notary. The owner promises to grant the bank a mortgage whenever the bank requires it. A mortgage promise is rarely used.

3. Why take out a mortgage loan?

A mortgage loan is intended solely for the acquisition or maintenance of property.“Acquisition” or “maintenance” means• the purchase, construction or major renovation/

conversion of a property;• the payment of inheritance and gift taxes on a

property;• the acquisition of the ownership share of a

property from a former partner (i.e. for support payments);

• the refinance of an existing mortgage loan with another financial institution.

4. Why use a credit?

A mortgage home loan is always granted in the form of a credit facility. This means that Nagelmackers advances you a sum of money which depends on how you acquired your property (outright sale, instalment purchase, construction, public auction ...).

The principal repayable may be re-debited (recovery of outstanding amount) in order to finance a further major renovation/conversion of the property that was the subject of the mortgage loan.

5. Who can take out a mortgage loan?

Any individual, irres pective of his social status (employee, self-employed, professional etc.) can take out a mortgage loan from Nagelmackers if the following conditions are met:• having his habitual residence in Belgium at the

time the credit contract is concluded;

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• he is acquiring or maintaining a property mainly for private use;

• he has adequate repayment capacity.

For companies Nagelmackers has other forms of bespoke credit, which are not described in this prospectus. If you need more information about this, do not hesitate to contact your Nagelmackers adviser. He will be happy to help you.

When you apply for a loan, the bank will consult certain data files to evaluate your financial situation.

The data files that are consulted are:• the data file of Bank Nagelmackers nv,

Sterrenkundelaan 23, 1210 Brussels;• the Centrale voor Kredieten aan Particulieren,

Berlaimontlaan 14, 1000 Brussels.

You can receive your personal data in these files free of charge and have them adapted if necessary. Your account manager would be happy to explain to you how to obtain your data.

6. How much can you borrow?

The amount you can borrow depends on your repayment capacity, the equity you want to invest and the value of the property.

Your adviser will work with you to analyse your personal situation and your project. He will look at your earned income, any interest or rental income and your expenses, such as existing loans. That way, he can best assess your repayment capacity for your new project.

The minimum amount of a mortgage loan at Nagelmackers is € 10,000.

The terms of redemption, such as the maturity, the interest rate, the amount of the monthly repayment and other elements, are determined in an agreement attached to the deed of the credit facility.

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The mortgage loan in detail The List of Mortgage Loan Rates for private use Together with this prospectus, you will also have received the List of Mortgage Loan Rates for private use. This document contains important information.

1 It contains the references of the prospectus and the List of Mortgage Loan Rates for private use and the date from which the conditions indicated apply.

2 The first column contains the different maturities and interest rate formulas. The second column contains our maximum annual interest rates. These are purely for information purposes. The calculations are based on the monthly interest rates in the third column. The fourth column contains the reference indices for variable rate formulas.

3 This indicates the discounts and bonuses that can be applied.

4 This indicates the other possible costs associated with your loan application, such as filing fees, expert fees and the drawdown fee.

5 As from 01.04.2017 - for loans subject to the Belgian Economic Code in Book VII, Title 4, Chapter 2 - the bank is required to inform any future borrower of an annual percentage rate of charge (APR) calculated taking into account of all costs borne by the borrower to obtain the credit on the terms set out in the offer.

In other words, all costs related to the credit (processing fees, appraisal fees, notary fees, fire insurance, outstanding balance insurance, account maintenance fees) are now included in the APR. And this is mentioned in the form called European Standard Information Sheet (ESIS) which is given to you when you apply for a mortgage loan.

3.2. Non-automatic payment fee

Annual fee Monthly fee

1.00% 0.0830%

3.3. Appraisal costs

An expertise will not be required if the amount of the loan is less than or equal to EUR 200,000.

If the amount of the loan is between EUR 200,001 and EUR 300,000, an expertise is not required if the percentage is less than or equal to 80%. On the other hand, the expertise will become compulsory if the proportion is greater than 80%.

An expertise is always required for all loan amounts above EUR 300,000.

Depending on the assessment of the risk of a file, the person called upon to rule on the loan has the right to require an expertise, regardless of the amount of the loan.

3.3.1. Buildings

Market Value (MV) Category 1 Category 2 Category 3

Market value estimated by an appraiser approved by Nagelmackers for private sales, plus the cost for work planned and/or necessary on the part of the contractor (VAT incl.)

Family homes(4)

(VAT incl.)Blocks of flats with max. 3 units(5) including max. 150 m2 meant for professional use(VAT incl.)

IBlocks of flats with more than 3 units(5) and/or more than 150 m2 meant for professional use(VAT incl.)

MV ≤ EUR 350,000 EUR 225 EUR 225 EUR 350

EUR 350,000 < MV ≤ EUR 750,000 EUR 225 EUR 350 EUR 450

EUR 750,000 < MV ≤ EUR 1,000,000 EUR 350 EUR 450 EUR 675

EUR 1,000,000 < MV ≤ EUR 1,500,000 EUR 450 EUR 675 EUR 900

EUR 1,500,000 < MV ≤ EUR 2,000,000 EUR 675 EUR 900 EUR 1,250

MV > EUR 2,000,000 or special building(6)

Offer Offer Offer

3.3.2. Terrains

Market Value (MV) Category 1 Category 2 Category 3

Market value estimated by an appraiser approved by Nagelmackers for private sales (VAT incl.)

Plot of land for a Cat. 1 building(7)

(VAT incl.)

Plot of land for a Cat. 2 building or a composite plot(8)

(VAT incl.)

Plot of land for a Cat. 3 building(9) or a plot for sale(VAT incl.)

MV ≤ EUR 250,000 EUR 150 EUR 225 EUR 350

EUR 250,000 < MV ≤ EUR 350,000 EUR 225 EUR 350 EUR 450

EUR 350,000 < MV ≤ EUR 500,000 EUR 350 EUR 450 EUR 675

EUR 500,000 < MV ≤ EUR 750,000 EUR 450 EUR 675 EUR 900

EUR 750,000 < MV ≤ EUR 1,000,000 EUR 675 EUR 900 EUR 1,250

MV > EUR 1,000,000 or special plots(10)

Offer Offer Offer

If the appraisal is cancelled before the on-site visit: EUR 35 (VAT incl.). Once the visit is made, all fees will be invoiced. Rescheduling after the 2nd missed visit: EUR 50 (VAT incl.).

List of Mortgage Loan Rates for private useInterest rates and fees for paid services valid as from 13.12.2017Replace the List of Mortgage Loan Rates for private use at 08.12.2017

Rate: CRED/043/1217 valid as from 13.12.2017Prospectus : 120/1217 valid as from 13.12.2017

21% tax applicable on services subject to VAT

1. Interest rates and reference indices

Effectiveannual rate

Monthlyrate

Initial reference index 11.2017

1.1. Fixed interest rates

10 year 3.77% 0.3089%

15 year 4.15% 0.3394%

20 year 4.32% 0.3531%

25 year 4.38% 0.3579%

1.2. Variable interest rates(1)

3/3/3 Cap +5/-5(2) 3.25% 0.2669% -0.0449

5/5/5 Cap +5/-5(2) 3.42% 0.2806% -0.0189

10/5/5 Cap +5/-5(2) 3.92% 0.3209% -0.0189

20/5 Cap +5/-5(2) 4.37% 0.3571% -0.0189

1.3. Bridging loan(1)

Max. 1 year 3.64% 0.2984%

2. Surcharges and discounts

Effective annual rate Monthly rate

2.1. Maximum surcharges(3)

Second rank or lower 1.00% 0.0830%

Loans partially guaranteed by a mortgage and/or mandate

0.50% 0.0416%

Share > 80% of the market value

0.30% 0.0250%

Special risks 0.50% 0.0416%

2.2. Maximum discounts(3)

Household income is deposited to a Nagelmackers account

0.05% 0.0042%

Outstanding balance insurance is taken out with Nagelmackers

0.15% 0.0125%

Fire insurance is taken out with Nagelmackers

0.10% 0.0083%

3. Fees

3.1. Processing fees

Mortgage loan/bridging loan Processing fees (CVAT)

Mortgage loan with or without mortgage EUR 500

Mortgage loan without mortgage and with multiple advances

EUR 500

Mortgage loan with mortgage and with multiple advances

EUR 800

Bridging loan without mortgage EUR 300

Bridging loan with mortgage EUR 500

An amount of EUR 250 (VAT incl.) is payable if the borrower requests to make an adjustment to the guarantees or the contract in progress (other than a change in the interest rate or its variability, the capital repayment method or the loan term).An amount of EUR 50 (VAT incl.) is payable in the event of exercise of an option provided for in the contract.For the delivery of a duplicate (contract, private deed, attestation ...), a cost of 41.33 EUR + VAT is charged.

(1) Not applicable for loans requested with the online mortgage loan simulator.(2) The CAP can never be higher than the applicable interest rate, after any reduction(s)

that you have obtained.(3) Not applicable in the context of a bridging loan.(4) With a space for professional use limited to max. 30 m2.(5) Examples of units include flats, studios, commercial ground floor units, etc.(6) Examples of special buildings include churches, chateaux, hospitals, etc. or blocks of

flats without long-term leases or surface rights, property leasing commitments, etc.(7) This includes a group of adjacent plots located in either an agricultural or a forested zone. (8) “Composite plot” is understood to mean:

- A plot for a family home along with land in an agricultural or forested zone OR - An annexed plot of land located partly in an agricultural zone and partly in a forested zone.

(9) Examples of this include building sites for blocks of flats, shops, SMEs, small businesses or offices.

(10) Plots of land used for public purposes, special buildings (see (6)) or plots without long-term leases or surface rights, property leasing commitments, etc.

Bank Nagelmackers nv - Sterrenkundelaan 23 - 1210 Brussels - T 02 229 76 00 - F 02 229 76 99 - www.nagelmackers.be - FSMA 025573 A - VAT BE 0404.140.107 - RPL Brussels

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December 13 2017

4. Representative examples

4.1. Mortgage loan

Examples of a mortgage loan of EUR 150,000 over 20 years, secured by a mortgage and repayable in monthly instalments.- Processing fees: 500 EUR- Notary’s fees: 3,625.50 EUR- No valuation fees, no fire insurance or balance insurance

4.1.1. Fixed rate - Constant monthly instalments

Annual real rate 4.32%Total amount to be redeemed (Capital + interest + handling fees + notarial fees)

226,804.70 EUR

APR (annual effective total rate) 4.66 %Monthly payment 927.83 EUR

4.1.2. Fixed rate - Degressive monthly payment payments

Annual real rate 4.32%Total amount to be redeemed(Capital + interest + handling fees + notarial fees)

217,941.50 EUR

APR (annual effective total rate) 4.70 %First monthly payment 1,154.60 EURLast monthly payment 627.20 EUR

4.1.3. Floating rate

Annual real rate Five-year variation (5/5/5) 3.42%Total amount to be redeemed (Capital + interest + handling fees + notarial fees)

210,463.10 EUR

APR (annual effective total rate) 3.75%Monthly payment 859.74 EUR

After 5 years, the rate can increase up to 6.84%. If the rate remains at this level, the total amount to be redeemed increases to 247,634.90 EUR, the APR becomes 5.50% and the monthly payment increases to 1,066.25 EUR.

4.2. Bridging loan

Example for a loan of EUR 150,000 for 1 year, secured by a mortgage, whose principal is repayable at maturity and interest is payable by monthly payment. - Booking fees: 500 EUR- Notary’s fees: 3,625.50 EUR

Annual real rate 3.64%Total amount to be redeemed (Capital + interest + handling fees + notarial fees)

159,496.34 EUR

APR (annual effective total rate) 6.62 %Monthly payment 447.57 EUR

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ABank Nagelmackers nv - Sterrenkundelaan 23 - 1210 Brussels - T 02 229 76 00 - F 02 229 76 99 - www.nagelmackers.be - FSMA 025573 A - VAT BE 0404.140.107 - RPL Brussels

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December 13 2017

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The different rate formulas

Nagelmackers offers you a range of formulas with fixed or variable interest rate.

Fixed rate formulasIf you opt for a fixed rate, you determine from the start the final amount that you will pay off every month for the entire term of your mortgage loan. This protects you from any interest rate rises, but you cannot take advantage of potential rate cuts.

Example: you borrow € 150,000 over 20 years at an annual rate of 3.5% (monthly interest rate of 0.2871%). You pay for 240 months an amount of € 941.70.

Variable rate formulas Nagelmackers gives you the choice between interest rates with a three-year (3/3/3) or five-year (5/5/5) revision, a first revision after 10 years and then every 5 years (10/5/5) or a one-off revision after 20 years (20/5).

The law defines the various aspects of the variable interest rate of a mortgage loan.

The interest rate of your loan will be revised according to the initial reference index (the index applicable on the date of signature of your mortgage loan).

The reference index will be determined by Royal Decree every month for each variable rate formula and then published in the Official Gazette.

The initial reference index, indicated in your loan proposal, is the reference index which is used for the entire duration of your loan whenever the interest rate is reviewed under the contract to determine a new rate.

The value of the initial reference index is that of the calendar month preceding the date of the List of Mortgage Loan Rates for private use. The value of the reference index at the time of the revision is that of the month preceding the date of the revision. On the tariff list these reference indices are indicated next to the corresponding credit formula.

The initial reference index is compared with the index applicable at the time of the revision of your mortgage loan. If there is a positive or negative difference between the two indices, the interest rate is changed appropriately. The following formula is used:

New interest rate= initial interest rate + (reference index at the time of the change - initial reference index).

The reference indices applicable in the event of interest rate revision are:• Index C (OLO 3 years) for the interest rate with

three-yearly revision;• Index E (OLO 5 years) for the interest rate with

five-yearly revision.

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The increase or decrease in your interest is limited to a specific percentage, called the CAP. This CAP is determined at the time you conclude your mortgage loan.

At Nagelmackers we work with CAP5, which means that the contractual interest rate can rise or fall by up to 5%.

The CAP must never be higher than the subscribed rate, after any discounts.

Example: you have a three-year adjustable rate of 3.50% per annum, which means that the CAP must be a maximum of 3.5 and a minimum of -3.5. Specifically your interest in the worst case cannot exceed 7%.

Intermediate rates can also be used at the time of the contractual revision, such as an increase or a decrease of 2%.

Any rate change will be communicated to you know later than the date on which the new interest rate becomes applicable. In addition you will also receive an adjusted depreciation table.

• The calculations are based on the monthly rate, as required by law. Interest rates are given on an annual basis for information only.

Example: an annual interest rate of 6.09% represents a monthly interest rate of 0.4939%.

The determination of the interest rate Possible increase(s) of interest Depending on your equity for your project and the risk taken by the bank in helping you to finance your project, the interest rates on the mortgage loan may be higher. You will of course be aware of this from the moment you apply for a credit simulation.

Possible reduction(s) of interest Depending on the bank account that you want to hold with us, we can provide additional interest rate reductions.

The conditions for the granting of these discounts are indicated in your credit agreement.

These discounts remain in effect for the entire duration of the credit, provided you fulfil your commitments. If this is no longer the case, the discount granted will be cancelled and the interest rate of your mortgage loan revised accordingly. You will also receive a new redemption table with the new rates applicable.

The lifetime

The term of your mortgage loan depends on the monthly payment formula that you choose. That period can vary from 1 to 25 years (see List of Mortgage Loan Rates for private use). The capital is only tax deductible if the term is at least 10 years and the loan is secured by a mortgage. That is one of the conditions for the tax deductibility of the capital and interest on mortgage loans.

Our variable rate formulas• 3/3/3 = revision every three years.

Increase or decrease limited to 5% compared with the rate of the first year.

• 5/5/5 = revision every 5 years. Increase or decrease limited to 5% compared with the rate of the first year.

• 10/5/5 = revision after an initial period of 10 years, and then after the fifteenth year. Increase or decrease limited to 5% compared with the rate of the first year.

• 20/5 = revision after a period of 20 years. Increase or decrease limited to 5% compared with the rate of the first year.

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The various credits

For the redemption of your mortgage loan, fully tailored to your projects and your financial situation, you can choose between different repayment terms.

In addition to the traditional forms of credit with capital repayments, you can also opt for a loan with fixed term.

Classic credits with capital redemption Redemption through constant monthly payments.If you choose a mortgage loan with constant monthly payments, then each month you redeem the same amount, which consists of a (declining) interest portion and a (growing) capital portion. The relationship between the interest and the capital portion changes in line with your credit requirement.

Example: mortgage loan with constant monthly payments for an amount of € 150,000 over 20 years, with a monthly interest rate of 0.3755% (= 4.60% annualised).

Monthlyinstalment

Interests Capital

1 € 949.46 € 563.25 € 386.21

2 € 949.46 € 561.80 € 387.66

3 € 949.46 € 560.34 € 389.12

240 € 949.46 € 3.55 € 945.91

Redemption by decreasing monthly payments With this formula you redeem a portion of the loan capital each month. The redeemable interest is calculated on the amount still to be redeemed and thus decreasing. So with this formula you only

pay more than with redemption in constant monthly payments, but the redemption amount becomes smaller each month. Because the capital is redeemed faster that way, over the full term of the mortgage loan you pay less interest than on a loan with constant monthly payments.

Example: mortgage loan with capital repayments amounting to € 150,000 over 20 years, with a monthly interest rate of 0.3755% (= 4.60% annualised).

Monthlyinstalment

Interests Capital

1 € 1,188.25 € 563.25 € 625.00

2 € 1,185.90 € 560.90 € 625.00

3 € 1,183.56 € 558.56 € 625.00

240 € 627.35 € 2.35 € 625.00

Credit with fixed term and without capital redemption over the life of the creditWith this formula you only redeem each month the interest on the loan amount. At the end of the loan you redeem the capital at once with your own resources.

We draw a distinction between a bridging loan and mortgage loan with fixed term.

Bridging loanDo you want to build or buy a new home, but are waiting for the full or partial funding from the sale of another property you own? Then you can cover the period with a bridge loan between the purchase of the new property and the receipt of the proceeds from selling your first property.

Interest

▼

▼

Capital

Interests

▼

▼

Capital

Interests

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The bridge loan has a maximum term of one year and may be renewed on request for an additional period of 12 months. As long as the loan is outstanding, you only pay monthly interest. Once your property is sold, you redeem the borrowed capital of the bridging loan in one go.

Example: you want a bridging loan of € 150,000 over one year, with a monthly interest rate of 0.2774% (= 3.38% annualised). You pay € 416 interest every month. When the deed of sale of your property is drawn up, you redeem the capital of € 150,000.

Mortgage loan with fixed term, also called bullet loan A bullet loan is a loan in which the loan capital is redeemed at one time on the maturity of the contract. During the term of the loan, you only pay monthly interest.

When do you receive the amount borrowed?Purchase of a propertyWhen you buy land, a new home that has already been built or an older home, you will receive the amount at once, at the time the deed is drawn up at the notary.

Construction or renovation of a property If you want to build or renovate a house, Nagelmackers will put the loan amount at your disposal whenever you request a withdrawal. This may take place in up to eight steps, the so-called tranches. The tranches are drawdown as work proceeds and on the basis of a pre-established payment plan.

For renovations or construction requiring a buil-ding permit, the amounts are paid only on pre-sentation of the building permit.

You only pay interest on the capital actually drawn. On the capital not drawn you pay a pro-vision fee of 0.0830% per month (1% per year). This fee is calculated monthly on the undrawn portion of the capital.

All tranches must be drawn within a period of 18 months.

Example: capital borrowed: € 50,000 over 20 years, with monthly interest of 0.4034% (= 4.95% annualised).

Capital drawn• On the signature of the deed: € 5,000• After 3 months: € 25,000• After 12 months: € 20,000

Which formula best meets your needs?That depends on a variety of factors. What amount would you like to redeem each month? How will interest rates change? What tax advantages will you have? Do not hesitate to put these questions to your Nagelmackers adviser. In consultation with you, he will look for the credit formula that best suits your situation.

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You pay• The first three months of 20.17 euros per

month interest (0.4034% at € 5,000) and a provision fee of € 37.32 (0.0830% on € 45,000).

• The next nine months: € 121.02 per month interest (0.4034% on € 30,000) and a provision fee of € 16.60 (0.0830% on € 20,000).

• From the 13th month: interest on the full amount of capital amortisation; no further provision fee is payable.

Simplify your life with our online mortgage loan simulator If you want to borrow between € 60,000 and € 300,000 to finance the purchase of a house, an apartment or an investment property in Belgium, you can now request a loan from the comfort of your home, whenever you want. Our tool allows you to carry out a simulation or an application for a mortgage loan online. Our simulator offers fixed rates for terms ranging from 10 to 20 years, and the mortgage loans must be secured by a mortgage registration of 100%.

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How do you buy your property?

There are several ways to buy a property. More information can be found in particular at www.notaris.be, the website of the Royal Federation of Belgian Notaries.

Outright sale

Purchase and sale promiseIf you are interested in a property that is for sale, you can start by submitting a purchase promise. In it you mention the price you are willing to pay for the property if the seller accepts the proposal.

This document is a unilateral promise which is binding only for you, throughout the duration of your offer. It is therefore important also to precisely define the duration of the sale offer. The seller, however, is not bound: he is free to accept the proposal or reject it.

You can include in the sale promise one or more suspensive clauses that impose certain conditions. Your offer is only valid if the condition(s) is/are met. A usual suspensive clause is not mandatory but is recommended, namely the condition precedent of obtaining a credit. This clause stipulates that your commitment is only final when you receive your loan. If the credit application is rejected, the sale cannot go through and the promise is no longer valid, even if it was already signed by the seller.

It is also possible for the seller to make a unilateral promise, a promise of sale. With it the seller promises to sell his property to you at a specific price. For the duration of the promise of sale the vendor is bound and may no longer sell the property to another interested party. However, you are not required to buy the property before you sign the promise of sale.

Once the seller accepts your purchase promise or you accept the promise of sale of the seller, the sale is final (unless the sale is subject to certain conditions precedent that have yet to be met). So do not hesitate to consult a specialist.

Sales contract through the notary After the sale promise there is usually, but not necessarily, a signed sales contract, with an authentic deed drawn up by the notary.

If it is possible to sign a contract immediately, we strongly advise against doing this without a notary having read the document and approved it first. Once the sales contract is signed, the sale is a fact. The seller and you cannot go back and you are bound, even if the sale has yet to be established and the deed is only signed a few months later, subject to certain conditions precedent.

The notary will check a number of things:• The buyer: he is the sole owner? Is he an adult?

Is he not bankrupt?• The property: a correct and complete description

of the property you want to buy; the best thing is a description of the property title literally taken over from the seller (condition, surface area, any easements ...).

• The indication of the price, the exact price, the payment method, the amount of the deposit, cash or deferred payment of the balance ...

• Any suspensive conditions and conditions precedent, such as that for the grant of a mortgage loan.

There are also a number of other entries, which your notary will discuss with you. That is why it is so important to conclude your sales contract before the notary.

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At the moment the contract is signed before a notary, you must pay a deposit, usually 5 to 10% of the purchase price, depending on what you and the seller have agreed. That amount can be paid through a bank draft or wire transfer. Payment in cash is prohibited. The amount will be kept in a separate account with the notary until the date of the authentic deed.

If you sign the sales contract at the notary, you will also receive a life insurance policy for up to a maximum of € 250,000. This insurance applies only if the sales contract is signed in the office of the notary and you have paid an advance of at least 5% of the purchase price. As an additional safeguard, the agreement should bear the seal of the notary, which he must date himself. In addition, the agreement should include a clause which draws the attention of the buyer to the existence of this insurance. The guarantee covers only the period of 4 months after the signature of the sales contract. For more information about this insurance, please contact your notary.

Period between the agreement and the authentic deedOnce you and the seller have signed the sale agreement, you can agree on a date for the drafting of the authentic deed. There is no statutory deadline as between the agreement and the authentic deed (the deed before a notary), so you can in principle choose that date for yourselves. However, you must take the fiscal period into account.

The Code of Registration Fees stipulates that the sale must be drawn up within 4 months after the date of signature.• Either the notarial deed is drawn up within that

period. In this case, the deed is both an authentic deed (required by law) and a sale agreement. The notary takes care of the registration.

• Or the deed is for some reason not drawn up within that period (which is also not required by law). In that case, the deed is drawn up later, but both you and the seller have the contract (different from the notarial deed) registered yourselves and pay the fee, within that period of four months.

It is therefore advisable to establish a deadline of four months between the signature of the agreement and the drafting of the deed.

You can choose a shorter period, but do not forget to take into account the time needed for the notary to perform certain administrative inquiries, the deadline imposed by particular financial institutions for granting loans ...

As a precaution, it is a good idea to choose a maximum period of four months and only proceed to the drafting of the deed when all searches are completed and you are also financially ready. Choosing a shorter deadline is itself a risk: if you cannot comply with this deadline for some reason, you may have to pay interest on late payments (subject to the provisions of the agreement).

Authentic deedWhether you have made a sale promise that was accepted, or have yourself signed a promise of sale and if you then have or have not proceeded to the signature of a contract, you must sign a deed before a notary. That makes the sale effectively opposable to all parties.

On the day of the signature of the deed, the notary reads you the deed and gives you all the necessary explanations. You pay the purchase price as well as the notarial fees, in principle through certified drafts or cheques issued by your bank, or bank transfer. The seller(s) and you then sign the document in multiple copies. One is for you.

At that time, congratulations are in order: you have become the owner of a property!

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Public auction

A public auction is called a sale by auction. There may be 1 or 2 session days. Those who have an interest in the property which is for sale make successive bids, and the person with the highest bid becomes the buyer of the property. Between the first and second session day a higher bid can be made. A public auction must be conducted by a notary, who announces the session day with posters and newspaper advertisements.

A property purchased at a public auction gain pretty fast, because often the deed is already signed within the calendar month (costs payable within 5 working days, the balance of the purchase price on the signature of the deed). For that reason, the law prescribes this procedure for some judicial sales. However, the procedure can also be used for a voluntary sale.

The notary draws up a deed with the description of the property and any sale conditions. This document, the specification, can be consulted by all prospective buyers in the office of the notary.

The offers are made during the sales session and sometimes start with a set price. If the last offer is accepted, the notary assigns the sale. The buyer then has a fixed period to pay the price and costs.

Some sales are only completed after a period of two weeks in which any interested person can still make a higher bid.

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What additional costs will your project incur?

Besides the price of the purchase or construction/renovation, you should also take into account various other costs. Below is a summary of the most important of them.

Costs associated with the purchase of a propertyOutright saleIf you are buying a property more than 2 years old, you will have to pay stamp duty: the (mandatory) registration fees.

You pay the following fees:• registration fees, for the price given in the

authentic deed;• costs of the registration certificate;• various fees and charges of the notary.

Sales subject to VAT For a new building instead of VAT you pay registration fees, which may be higher. It is important to keep this fact in mind when you determine your budget.

Since January 1, 2011, there is a new system for this: with a joint sale both the land and the new building are subject to 21% tax.

The VAT system applies to built buildings, buildings under construction and new buildings.• For properties still to be built the buyer pays the VAT

to the supplier in line with the progress of the work.• The same applies to buildings under construction or

newly constructed buildings not older than 2 years. A new building should however be sold on 31 December of the second year following the year of the first occupancy or first use of the property. In the event of resale of a new property, the private seller may request the application of VAT.

The registration fees depend on the

region where the purchased property is

located and on your personal situation

(first property, dependent children,

rateable …).

Your notary will help you determine

the exact amount.

Flemish region

In the Flemish Region the registration

fees are 10% (or 5% on certain

conditions). In some cases, the tax base

is reduced by € 12,500 or the

registration fees are deductible.

Brussels Capital Region

In the Brussels Capital Region the

registration fees are 12.5%. Under

certain conditions the charge can

be reduced on an optional basis by

€ 175,000.

Walloon Region

In the Walloon Region the registration

fees amount to 12.5% of the price of

the authentic deed or 15% if it is your

third property. On certain conditions

you pay 6%.

Your notary can calculate the

percentage you must pay, depending

on your situation and the rateable

value of the property you want to buy.

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Costs associated with your mortgage loanCosts of the deed for your mortgage loan The deed for your mortgage loan will also involve costs. They will depend on the guarantee selected (mortgage or mortgage mandate) and include:• registration fee (1% of the mortgage registration

+ additional costs, such as a flat rate for the lending agency to cover the costs it must advance to recover the loan amount in the event of default);

• drawdown charges;• costs for the registration of the mortgage in the

records of the office of conservation of mortgages (0.30%),

• fees for the notary,• miscellaneous costs,• 21% tax on fees for the notary and miscel-

laneous costs.

These costs do not apply if you request a credit acquisition under an existing credit facility with Nagelmackers.

For a precise estimate of these costs, ask your notary or website www.notaris.be.

Appraisal costsThe costs of the expertise are indicated in the List of Mortgage Loan Rates for private use, and are payable to the expertise office at the request of the latter, even if the loan is not granted thereafter.

Processing feesThe processing fees are indicated in the List of Mortgage Loan Rates for private use.

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Protect your family and your investment Life insurance

For death coverages associated with a mortgage loan we make a distinction between:• the outstanding balance: for a classic mortgage

loan;• temporary insurance with fixed capital: for a

mortgage loan with a fixed term.

Loan balance insuranceA life insurance policy protects your family if the purchaser(s) die(s) before the loan is redeemed. The insurance company redeems the amount due to Nagelmackers fully or partially, depending on the coverage you have chosen.

Example: you and your spouse are each covered for 75%. If one of the two dies, the survivor will pay 25% of the monthly repayment. The remaining 75% is paid by the life insurance.

You decide whether you pay a single premium or make regular payments. As long as you are bound by a payment order, you will remain covered during the whole term of the loan, irrespective of the frequency of payments.

The life insurance also takes into account various tax formulas: bone home, long-term housing savings, pension savings. Your Nagelmackers adviser will help you choose the right formula to optimise your tax situation.

Term insurance with fixed capitalYou can also opt for term insurance with fixed capital. This means that you ensure a fixed capital amount for the term of the contract. The sum insured in this way does not decrease as you redeem the capital of your loan.

This insurance formula is suitable for fixed term loans.

Property insurance

In the context of your mortgage loan Nagelmackers can ask you to insure your property against fire and other risks (water and storm damage, broken windows ...).

You can always contact your adviser for a simulation based on your personal situation.

For debt balance insurance policies taken out by persons with an increased health risk, there is a solidarity mechanism between the insurer and lender for additional premiums higher than 125% of the basic premium but lower than the ceiling of 800% of the premium.

This insurances do not necessarily have to be subscribed at Nagelmackers. If that is not the case, the discounts linked to the subscription of these insurances will however not be applied.

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Possible costs during the credit

Non-drawdown fee

This fee is calculated on the capital amount not drawn down of the credit granted to you for the construction or major renovation/conversion of your property. This non-drawdown fee is mentioned in the List of Mortgage Loan Rates for private use.

Costs for the change of the contractIf you wish to change the terms of your current loan, you will be charged fees. These can be found in the List of Mortgage Loan Rates for private use.

Costs for the early repayment of your mortgage loanIf you want to redeem your mortgage loan early in full or in part, Nagelmackers will charge so-called re-investment compensation. This fee is equivalent to three months interest calculated on the early repayment of capital.

There is no fee payable if the prepayment is due to the death of the borrower and the outstanding balance of the loan is redeemed.

For the early repayment of a bridge loan, no early redemption fee is charged.

Cost of a mortgage transfer

If you want to transfer your mortgage registration to a new property, so that you pay less legal fees, you must pay certain other costs. Your notary can calculate them for you.

Costs for the cancellation of the mortgageIrrespective of the term of your mortgage loan, a mortgage is always taken out for 30 years. Thus for example you can, once your capital is partially or fully redeemed, apply for a new credit without going to the notary again, but instead signing a private agreement with your bank.

If you do not want the bank still to have a mortgage on your property after the redemption of your loan, you must obtain a waiver from your notary. There are costs involved in this. We recommend that you consult your notary for a precise assessment of those costs.

The charges in case of non-paymentIf you’re having trouble paying off your loan, we’ll help you find the best solution to deal with these repayment difficulties.

There can be a number of adverse consequences if you do not reimburse the amounts due on time.

A non-payment of the amount owed on the agreed due date will lead to an increase in the interest rate by 0.50% on an annual basis for that due date. The same additional interest can also be demanded for the period between the non-paid due date and the actual payment of the capital.

When a non-payment is still not regularised after a notification by registered letter, it has to be reported to the ‘Central Individual Credit Register’ in order to be recorded in their central database. In that case, it could be very difficult for you to apply for a loan in the future.

As a final measure, the bank can cancel the loan and have your house seized. That is possible if you fail to make two consecutive instalment payments

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and if you have not responded to the bank’s final notice to pay your debts.

So don’t wait until you receive a final notice from the bank to pay your debts, but contact your

account manager immediately to discuss your situation and try to find a solution. That way, you avoid the harmful consequences of a late payment.

Definitions Source: www.notaris.be

Notarial deedThe law requires the intervention of a public official, the notary, to make the sale “opposable”. The sale must be the subject of a notarial deed, which has the status of an agreement order.

Before the deed is drafted, the notary must perform a number of administrative searches. He then draws up the deed. On the day of signature the notary will read the deed to the parties, explain the content and sign the deed with the parties. Then he ensures compliance with the new administrative formalities for the conveyance of the property title to the buyer.

The different steps of the deed of sale are thus:• previous searches;• the drafting of the document and the analysis of

its content;• the signature of the deed;• the formalities after the signature.

Suspensive conditions and conditions precedent in a sale• The suspensive condition: the sale contract does

not exist as long as the condition is not met. The very existence of the sale depends on a future and uncertain event.

• The condition precedent: there is a preliminary sale agreement, but if the condition is fulfilled, the sale may be rescinded.

In the first case there is therefore no sale, in the second the sale is already a fact.

Fees for the notaryThe fee is the remuneration received by the notary. This fee is determined by Royal Decree and is the same for all notaries.

RateableA notional amount deemed to correspond to the annual rental income of a property.

EasementAn easement is a charge imposed on a property. It is not incumbent on the owners but on the property to which it applies, irrespective of the person who owns it. For example, a right-of-way gives the right to pass along a field to reach another area.

AdjustmentAn amount in cash to be paid by the person receiving a plot with a higher value in a distribution than the portion allocated to him. On an exchange of property an adjustment can also be paid.

Hidden defectsIf after the acquisition of property you discover a hidden defect (which you had been unable to determine during an inspection with the normal diligence of a prudent man), you can be reimbursed through the courts if you demonstrate the damage, acts quickly and prove the bad faith of the seller (in this case the fact that the seller should have known of the existence of the defect). If a hidden defect or serious defect (which affects the soundness and stability of the building) is detected, the architects and the contractors are bound by a special obligation to repair it.

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