How to get a mortgage in the Netherlands?

Renting in the Netherlands can be extremely expensive, especially if you live in big cities like Rotterdam, Amsterdam or The Hague. So, if you are an Expat, you live in the Netherlands and you are tired of throwing your money away in renting, you might want to consider buying a house or an apartment.

LET’S START!

The first thing you have to do is define, based on your needs, what kind of property you’re looking for, like a house in the countryside or an apartment in the city. As you can imagine, if you want to live in Amsterdam, for instance, you’ll need more money compared to a smaller city or a village in the same region. A nice website to do some research is funda.nl but also do not forget to check on WOZ website which gives you the possibility to consult the value of the property you are interested in. The value you’ll find on the website is formally established by the municipality, so pretty much reliable 🙂 

Once selected the property/properties you would like to see, what you need to do is just contact by phone or email the real estate agent who listed them on Funda and book an appointment to see the house.  

HOW MUCH WILL YOU END UP SPENDING?

The second decision you need to make is how much you want to spend. Setting up a budget is really important because it tells you how much money you can spend to purchase a property.

Apart from considering your savings (if you have some) it’s good to search for a mortgage calculator.  A mortgage calculator is a tool that most of the banks make available on their websites and it helps you to find out how much money the bank will loan you, the interest rate and the monthly amount you’ll have to pay back. If you prefer, you can also check this on third-party websites like mortgagemonster.nl and finsens.nl

In calculating your maximum mortgage, you have to take into account:  

  • your income plus the one of your partner (if applicable) 
  • other financial commitments such as other loans (like a lease car) or alimony 
  • the part of your income you can spend on your mortgage 

Consider that this is just an online estimation, in order to get the confirmation of the mortgage, and of course the final amount, you need to go to the bank.

You should also define how much down-payment you can afford to pay and think about if you want an advisor or not. He/she can be really helpful during the house staging offer, suggesting you how much to offer based on the house conditions, how many people are trying to get the house etc..  

IT’S TIME TO GO TO THE BANK!!

Whatever bank you’re going with for the mortgage, be prepared to bring with you or send via email a bunch of documents like: 

1. Employer statement of the previous year, which is not older than 3 months and with the same employer for at least 6 months (both you and your partner if applicable) 

2. Valid passport or ID (both you and your partner if applicable) 

3. Residence permit (both you and your partner if applicable) 

4. Signed purchase contract of the house/apartment

5. Appraisal report of your new property ( maatwerk.nl is a useful website).

6. Most recent payslip (both you and your partner if applicable) 

7. Recent overview of your pension status (you can download a PDF from  www.mijnpensioenoverzicht.nl

8. Name, address and contact details of your notary 

9. Signed advise offer (provided by you) 

10. Overview of any loans, investments, life insurances, disability insurances etc. (if applicable) 

11. Copy of your divorce papers (if applicable) 

12. Overview of all your financial assets/ bank accounts etc. (also abroad) 

13. BSN application form (scanned copy) 

14. Document/ letter of your 30% ruling application (if applicable)   

AND FINALLY… OH NO STILL TO THE BANK! 😦

The previous long list of documents is not going to be enough as the bank will also ask a bunch of extra questions like: 

1. What kind of mortgage would you like to go for?  In the Netherlands there are two types: annuity an linear. I suggest you to take a look at mortgagemonster.nl as there is simple but exhaustive explanation about the two types of mortgages and choose based on what you think it’s going to be favorable for you

2. What kind of interest would you like to have? Fixed or variable? Fixed interest (yes there are several fixed-rate periods to choose from…) means that your interest remains the same during the chosen period (the classic period on offer is 10 years) which means that it protects you against rate increases but you will not be able to benefit from interest rate decreases. If you want more risk you can choose a variable interest, this means that the monthly rate will not be the same every month but you can often make unlimited fee-free repayments (which will cost you instead with a fixed interest).

3. Are there any extra savings that you would like to bring in upfront? 

4. Are you married or do you have a partner that you are living together with? 

5. Do you have kids? If so, what are the first names and date of birth 

6. Do you have any loans anywhere else? This is a double check in case you forget to submit the loans documents 

7. How much rent are you paying at the moment? 

8. For what amount would like the mortgage for? 30 years or 15 years? 

The main advantages of a 15 years mortgage are:

  • lower interest rate compared to a 30 years mortgage
  • you pay off your home in 15 years instead of 30 years
  • you’re going to build up equity faster compared to a 30 years mortgage

But what about the cons:

  • in order to pay off your house in 15 years, your payments will be really high compared to a 30 years mortgage.
  • you’re going to have less cash-flow since most of your money will be going towards paying your property and this means that you’re going to have less cash to invest in other more profitable things

The main advantages of a 30 years mortgage are:

  • lower monthly rate compared to the one you will pay with a mortgage of 15 years
  • you’re going to have more money left every month that can be used to invest in other things
  • since you’ll have a lower monthly payment you will be more qualified for larger loan in the real estate market

Let’s now see the cons of a 30 years mortgage:

  • higher interest rate compare to a 15 years mortgage
  • you’re going to build up equity slower compared to a 15 years mortgage
  • it will take you longer to pay off your property

Once you have the GO from the bank, it’s almost done as you’ll just need to go to the Notary to sign off the purchase deed and you’ll get the keys.

The property will finally be yours! 🙂

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