How To Obtain Your Dutch Mortgage when buying a home!

Ever since you have decided to settle in the Netherlands you might have wondered whether to keep renting or to buying a home. Once you made up your mind that you want?to buy a home?and you contact your real estate agent, she will also ask you about your financial situation. The question about how much you can borrow will certainly arise. This after all, might be?THE?decisive information before you are going house hunting with your buyer’s agent.

Then, you will start off with?an intro session?where your Dutch mortgage broker will get a good sense of your wishes as well as your personal and financial circumstances. To some extent your knowledge on financial products such as Dutch mortgages will be discussed as well.?

After that, your mortgage broker will?focus on your recent pay slips?as well as an?employer’s declaration?(“werkgeversverklaring”), the latter being a standardized form of your annual income. You can ask your HR manager for it. In some cases, also a copy of your employment contract is needed. Based on all the above your Dutch mortgage broker tells you how much you can borrow. Once you signed a purchase contract, she will contact the money lender that best suits your needs.

Borrowing less is always possible, but if you want to know your maximum Dutch mortgage, your mortgage broker will give you certainty. However, since Dutch mortgages are regulated, you can also make some calculations on your own. And here is how it is done:?

Dutch mortgages mainly depend on two major factors:?

1. Your income and?

2. The appraised value of the collateral.

It is either your household’s income times five (approximately!) or 100% of the appraised collateral-value. Whichever are lower equals your maximum loan.?

Case study:

Let’s say that you earn?€70.000?per year and the appraised value of the property is?€300.000. Since the fivefold of your income is?€70.000 x 5 = €350.000, it will be the (lower) appraised value that determines your maximum Dutch mortgage, i.e. your maximum loan is?€300.000.?

Keep in mind however that this is?only a rough estimate!?Ultimately there are more complex formulas involved and more factors do come into play. Think of additional salary components (i.e. allowances) that one lender might want to account for, while the other won’t. And do think of remuneration in other currencies, tax laws specifically applicable to expats, the location of the property, etc. All this weighs in when the lender decides on how much you will be able to borrow. And this is exactly where your mortgage broker will prove invaluable. He will act on your behalf while guiding you through the application process step-by-step.?(Please understand that this is a case study and any debt on the side of the mortgage taker is excluded!)

The whole approval procedure?takes between two to six weeks depending on the complexity of the application. In the meantime, your Dutch mortgage broker is watching your deadlines and will provide additional documentation to the lender. Once the money lender agrees to extend the mortgage to you, you will be receiving a?commitment letter?(“bindende offerte”). As soon as you agree with the contents of the document - you have a deal. Now you can proceed to the civil law notary where transfer of deed is taking place. Your dedicated real estate agent can help you with choosing a notary and will accompany you on the day of the transfer of the deed.?

Congratulations – you finally own your Dutch home!!

Contact us, if you do need more information, insights or explanation about your mortgage or for that matter the purchase path. Or if you want a second or even third opinion.?We are here to help you!?

Karola Grünenbaum,?

director Stark Real Estate?

Speaker and Author "The Hague, Houses & Happiness"

https://www.starkrealestate.nl

https://www.thehaguehousesandhappiness.com?

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