Buying a house in the Netherlands

Expats

Have you seen a new home and would like to know if it is within your reach? Or do you already own property in the Netherlands? You’re more than welcome to visit our office for a free appointment to identify the best mortgage available to you whether it be to increase or begin your Property Portfolio.

Most people who want to buy, build or renovate an existing home need a loan to do so. A loan you take out for your home is called a mortgage. You pay interest on what you have borrowed, while you usually repay the loan over a period (‘term’) of thirty years.  Shorter and longer terms are also available, but mortgage interest is tax deductible for no more than thirty years.

How much you can borrow depends on a number of different factors. These factors include, your income, the value of the property you wish to purchase, your anticipated future outlook, your preference in repayment method and any additional expenses involved in the purchase process. We can use these factors to give you a calculation of how much you are likely to be able to borrow over your chosen term from each mortgage provider in the market.

The next step is to assess the various mortgage options available to you and select your preferred provider. We will ensure the best possible mortgage is chosen for your specific needs.

 

What different kind of Mortgages are available?

In order to best benefit from taxes, it is best to begin paying off the loan promptly after the sale is complete. Therefore only two main mortgage types are to be considered. But sometimes a mortgage with interest-only is more fitting to your situation. Both mortgage types will be discussed with you in full to ensure a clear understanding.

Linear mortgage (lineaire hypotheek)
The borrower repays a fixed sum each month, which covers the interest and a slice of the capital. Repayments are fixed over the entire period.

Annuity or repayment mortgages (annuïteiten hypotheek)
The borrower repays a fixed amount of the capital each month, plus a fluctuating amount of interest. Repayments will go down over the loan period.

Mortgage interest

Mortgage interest rates move in line with economic developments.You can choose the length of time that the interest rate will apply for your mortgage. So you know exactly how much interest you will need to pay each month for that period. The period you choose is called the ‘fixed rate period’. Alternatively, you can opt for a variable or floating rate of interest, which means the interest rate may change each month. If interest rates go down, you’ll be better off with a variable rate mortgage. However, if rates go up, you’ll pay more than if you had fixed the rate. A variable rate also means you will not be sure how much you will be paying each month. If predictability is very important to you, the best option is to agree a fixed interest rate for the entire term of your mortgage.

For example if you fix the rate of interest for ten years. When the ten years are up, your interest rate is adjusted to the rate applicable at that time. You have to agree than with a new period for the fixed-rate. This new rate may be higher or lower than what you were paying in the first ten years.

A Martgage with National Mortgage Guarantee Scheme  (NHG)

NHG Offers secure and affordable home loans. You pay less interest with an NHG mortgage than with most other mortgages. The scheme also provides protection under certain circumstances.  But this will all be discussed in detail during your consultation.

The costs

In this first appointment we will discuss your requirements,  your financial position and the main options available to you going forward, We will then look to make a second appointment to present the specific mortgages available to you over your chosen term and preferences.

Contact

Our clients include both Dutch Nationals along with those settling in the Netherlands and looking to buy their first home.

Please do not hesitate to make the first step to buying your new home, Give us a call.  Our goal is to help you attain your ideal property and help you every step of the way.

Roadmap of our advice

Step 1:
What Size of Mortgage and what kind of House are available to you in Holland?

Upon beginning your search for a suitable home, contact Martinot financial for a free, impartial consultancy. 

During this initial consultation and through mortgage calculations we will give you an accurate indication of what properties are within your price range, allowing you to refine your search and act swiftly upon identifying a home which best suits your needs.

Step 2:
Looking for a beautiful home

When looking for a property in Holland, there are two main ways to conduct your search. Depending on which suits best you can browse yourself through specialized housing websites making enquiries and appointments yourself or enlist the help of a broker who will assist you by conducting the search and suggest potential suitable homes.

The next step for your agent to make a valuation and enter into negotiations on your behalf.

Step 3:
Buying a home

Congratulations! You have been successful in buying the property and now to sign the contract.

Important things to know:

In the Netherlands, you have the right to cancel the contract of sale within three days of signing, without providing a reason. A notary is always involved in the purchase and sale of a property. As a property buyer, you can select the notary of your choice. 

The contract of sale

The contract of sale contains information about the property, the price, the obligations of the buyer and the seller, the date of conveyance and the guarantee.

There is a guarantee which comprises a 10% deposit to the civil law notary’s escrow account. This deposit can also be paid in cash to the civil law notary’s third-party account if sufficient liquid assets are available. Another option is to apply for a bank guarantee, something we can arrange on your behalf.

Clause

The contract usually includes a clause stating that the agreement is pending financing, which specifies the amount of time you have to arrange the necessary funding to allow the purchase to proceed. If you do not succeed in obtaining a mortgage within the agreed period (usually four to six weeks), you can unilaterally terminate the contract. You will, however, need a written statement from two banks confirming that they have rejected your mortgage application.

The purchase price is always followed by one of two abbreviations: ‘KK’ or ‘VON’. ‘KK’ means that all of the costs associated with buying a property are borne by the buyer (‘kosten koper’ or ‘purchasing costs payable by the buyer’). ‘VON’ stands for ‘vrij op naam’ or ‘purchasing costs payable by the seller’, which in most cases only applies if you are buying a new build property.

Step 4:
Making a consultation appointment

For the next appointment we will discuss what mortgages are available and which mortgage suits your needs best.

In preparation for the second appointment we will require a number of documents in order to proceed. With your second appointment there will be a cost which will be discussed prior to proceeding.

Step 5:
Mortgage application

During the mortgage application process we will ensure you understand the mortgages on offer fully and give impartial advice which will best benefit you.

The mortgage you can get depends on these main factors:

  1. Your income. Loan too income value.
  2. The ratio between the property value and the mortgage amount. Loan to Value.
  3. The interest on your loan.
  4. Nationality is important. Some banks make a distinction between EU and non-EU citizens in their mortgage considerations.
  5. Tax status:  This is used to verify whether the applicant is a tax payer in the Netherlands and/or whether the 30% regulation applies.
  6. Private home ownership is deemed in the Netherlands to be an income constituent for income tax purposes. All costs, charges and depreciations associated with home ownership are therefore eligible for a tax allowance.
  7. Home ownership and the above expenditures are incorporated as a fixed sum in the taxable (net) rental income. The payable interest and the costs associated with home acquisition debt can be deducted from the progressively taxable income from employment and home ownership (box 1).
Step 6:
The notary

Once you have completed the previous steps you will receive a date of issue, this is the date on which you will receive the keys to your home. Upon receiving this date you will engage with the notary.

The notary is responsible for: 

•Drawing up the contract of sale

•Drawing up the deed of delivery for the property

•Drawing up the mortgage deed

•Filing the details with the public registers

•Conducting a survey

•Overseeing the settlement and transfer of funds

Step 7:
Insurance

The correct home insurance is important to ensure you can recover any costs from and damage your property incurs. These are the different types of insurance and what they cover.

•Homeowners insurance ( ‘woonhuisverzekering’)

This insurance policy covers damage caused by fire, burglary, etc. The bank requires such a policy in order to establish a mortgage.

•Contents insurance ( ‘inboedelverzekering’)

This insurance policy covers damage to the contents of your home due to fire, burglary, etc.

•Health insurance ( ‘ziektekostenverzekering’)

•Liability insurance (‘AVP’ or ‘WA’)

This insurance policy covers personal claims made against you.

Step 8:
Moving

Only this you really have to do! We wish you a lot of living pleasure in your new home or a pleasant deposit of the changed mortgage.

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Martinot Financieel © 2019