Questions and answers
In basic terms, you take out a mortgage from a mortgage lender as a long-term loan to make payments on a property. The mortgage lender has the option of taking possession of the property and selling it on if the mortgage repayments aren’t made. This is so that the lender doesn’t lose money as they would be making it back from the property sale. Any time you take out a mortgage, the loan is then split into two aspects. One of which is the interest, which is what the lender charges for lending the money. The other is the capital, which is the actual amount of money used to purchase the property.
Mortgage brokers are specialist mortgage providers who will look for a suitable mortgage product on a client’s behalf in order to ensure they get the best possible deal. Fees and success rates vary from one broker to the next. Expat Mortgages works with a fixed fee, see ‘conditions of service’. A bank will charge a fee when you would go direct without a broker. When using a broker you don’t pay the bank a fee for getting a mortgage loan with them, you only pay the broker.
It is a legal requirement in the Netherlands to have a mortgage advisor acting between you and the lender. This is because a mortgage is a product with a huge impact on your life and the Dutch government believes you should be well aware of the potential risks.
There is no legal requirement to have an estate agent in order to buy a property. But, especially for internationals, it may be wise to engage a qualified agent to assist and advise you on certain locations, type of properties and to help you with the paperwork when buying a house. An agent has experience in dealing with different types of properties and can point out certain risks for you as a buyer.
Two types of mortgages qualify for partially tax-deductible interest: an annuity-based or a linear mortgage which repay the entire capital in a maximum of 30 years. The annuity mortgage front-loads interest and has a fixed monthly payment. With a linear mortgage, you repay the capital loan at an equal monthly rate plus interest on the remaining loan. There is an option to apply for an interest-only mortgage for up to 50% of the property’s official value, but this interest will not be tax deductible.
In general it takes up to 4-6 weeks, but with Expat Mortgages we have special arrangements with mortgage lenders which makes it possible for us to achieve a mortgage approval within two weeks. Ask your consultant about this.
When purchasing a house, in 95% of cases you are buying the house K.K. (kosten koper: the buyer pays the costs). These costs are approximately 5-6% on top of the purchase price if you are buying a house to live in yourself. The expenses include: a 2% transfer tax (stamp duty), a notarial fee for passing the transfer and mortgage deeds, the costs for your buying agent if relevant, the costs for your mortgage consultant, an evaluation report, an optional structural survey, a bank guarantee, land registry costs, an interpreter if needed and potentially the fee for the NHG (National Mortgage Guarantee).
By law in the Netherlands, the notary is obliged to speak the Dutch language and to have you sign Dutch official paperwork. If your Dutch is not good enough, a sworn interpreter has to be present. The interpreter will translate from Dutch to your mother tongue or English.
You qualify for a mortgage in the Netherlands if you are officially resident in the Netherlands and have income (employed or self-employed). There is no need to have an indefinite contract: a temporary contract is also accepted if your employer is willing to sign a letter of intent. If you are self-employed (an entrepreneur) you have to show a track record of income over the past 3 years.
As a non-EU citizen, it is indeed required to have a residence permit. This does not need to be a permanent permit. A temporary one is accepted as well, but it depends on your residential status.
There is a rule of thumb that we use: approximately four or five times your gross annual income. For an accurate calculation, we advise you to have your lending capacity worked out by a mortgage advisor.
It is the right time to buy a house if you feel like it is the right time to buy a house! It is also the right time after you have done your financial homework: you should speak to a mortgage consultant who can determine your budget and the monthly installments related to your maximum budget.
You can find a property online (for example with the estate agent-owned website: www.funda.nl). You can also engage a real estate agent to help you with the search. Private sales are also possible in the Netherlands.