Buying a house in the Netherlands with De Hypotheker

Introduction

When looking for your ideal home, one of the first things you want to know is how much money you can borrow and which mortgage best suits your wishes. De Hypotheker is more than ready to show you the way. To begin with we help you find the best deal by comparing the mortgages of all banks, including your own.

We help you, first of all, to create a clear picture of your current personal and financial situation, and of the things that might happen in the near and distant future. In addition we offer guidance in all the financial issues you come up against during the process of buying your first home. Of course, if you prefer, you can also handle these issues yourself (online). And as long as you are a homeowner you can always call on us for independent advice.

The Hypothekers Approach

1. Inventory

From the very beginning you will be appointed a mortgage advisor who will be your personal contact for every discussion. In the first meeting, you will get to know each other and the advisor will explain in detail what he or she can do for you and what the fees are.

2. Analyses

On the basis of the information the advisor has received, your advisor will look for the type of mortgage that best suits you. The analysis focuses on four points:

1. The loan itself: how much do you want to borrow and how much can you borrow? How much interest will you be paying?
2. The repayment plan: in what way will you repay the mortgage?
3. The fiscal construction behind the mortgage and its consequences.
4. Will you still be able to pay for the mortgage if you or your partner passes away, becomes disabled, loses employment or retires?

These points have consequences for your monthly expenses, the risk that you run, and the capital that you build up in order to repay your mortgage. They must also be in line with your personal situation. With the help of a unique computer program that includes all the necessary information of financiers, your advisor will work out different scenarios.

3. Advice

Working closely with you, your advisor will draw up a personal advice plan. He or she will also provide an explanation of the various options and conditions, and present a comparison. This will enable you to select the ideal type of mortgage and mortgage institution for you.

4. Taking out the mortgage

Once everything is said and done, your advisor will apply for an offer. As soon as he has received the offer, he will go over it with you in detail. If you agree to the offer, it will be signed. As soon as the financier has approved the offer, the mortgage will be taken out.

5. Quality
   

De Hypotheker sets high standards for the quality of its services. Our certified mortgage advisors regularly attend courses to stay up to date on the latest developments.

Types of mortgages

When it comes to mortgages, many people look at the interest rate first. However, the options for adjusting the type of mortgage and the repayment plan in the interim are just as important. You should also take a good look at the fiscal consequences, the expenses and premiums.

What is the true price of a mortgage?

In addition to the interest and the premium, the ‘price’ of a mortgage is determined by the repayment plan, the fiscal aspects and any additional conditions. De Hypotheker has a unique automated advice system which provides you with a clear picture of the true price of a specific mortgage. The data of all financiers and insurers in the Netherlands are included in the system. That way it is possible to make an objective comparison of all mortgages.

The flexibility of the mortgage

Most mortgages have a term of 30 years. In practice, however, there are few mortgages that continue for the entire period without changes. That is why it is important to choose a mortgage that is flexible. During the term of the mortgage you then have the option to adjust a number of matters. There are usually charges involved.

You can determine the degree of flexibility by looking at the following points:

• What options are available for a subsequent fixed interest period?
• To what extent are extra payments possible and what are the related costs?
• If I move, can I take the mortgage with me without incurring costs and at the same interest rate?
• Can I pass on the mortgage at the same interest rate and without penalty and handling fee to a future buyer of the house?
• What options exist to extend the term of the loan?
• Can I increase the mortgage without incurring notary fees?
• Can I continue the life insurance policy separately from the mortgage?
• Can I dispose of my investment balance in the interim?

The acceptance policy of mortgage institutions

All mortgage institutions have their own acceptance policy: rules which must be met before a mortgage is granted. Usually the following aspects play a role in the acceptance policy:

• What is the maximum mortgage amount that can be borrowed based on the income and the value of the house?
• What standards are applied without a Nationale Hypotheek Garantie?
• How does a financier determine one’s creditworthiness?
• To what extent will your partner’s income be counted
• To what extent is a mortgage possible if you are in part-time employment?
• Are special conditions set with regard to health or age?
• What are the conditions regarding repayment of the principal sum?
• What is the condition of the house?

Taking out a mortgage

Have you selected a mortgage? Then De Hypotheker will take care of the application for the mortgage offer and will submit the requisite documents. The mortgage institution will check your application against its own rules and will draw up an interest offer. The offer will set out, among other things, the amount of the loan, the conditions, the interest percentage and the monthly instalments. Usually you have about two weeks to accept this offer. Then everything has to be officially arranged – from the approval of the financier and the medical examination to the drawing up of the documents by the notary and the deed of transfer. De Hypotheker will take care of these formalities for you. 

The notary

After the acceptance of your offer your advisor will inform the notary that the documents are available. After the evaluation the mortgage institution will send the requisite papers to the notary. Once the notary has received these, you will be invited to sign the mortgage deed and purchase deed for your house. This is called the execution of the mortgage deed and/or the deed of transfer. At the same time the notary will send you the draft of the mortgage deed and the final invoice. The final invoice also states the amount of your own money that must be transferred to the notary. De Hypotheker will take care of the entire mortgage application process. The notary arranges the financial side; he will ensure that all documents comply with the wishes of the parties involved. Many mortgage institutions will pass on the advantage to the lender/buyer if interest rates drop between the date of the offer and the date of execution of the mortgage deed. Partly for this reason the interest can be lower, but never higher than the interest in the offer, provided the validity term is not exceeded.

About us

De Hypotheker is the largest advice and intermediary organisation in the Netherlands for all financial services associated with your home. With approximately 180 branch offices around the country there is always one near you. More than a million people have already trusted us to help them with the most important possession in their life: their home.

We seek out the mortgage that is ideally suited to your needs. That is because De Hypotheker is completely independent: we only serve the interests of our clients. We compare the mortgages of all banks – including your own bank – based on your personal circumstances and wishes until we have found you the best possible deal. This offers you security and financial benefits. And for as long as you are a homeowner you can always come to us for advice concerning your home.

What is involved

Estate agent

An estate agent can be engaged whether you are buying an existing house or a new build house, either by the seller or by yourself. It is also possible to sell or buy a house without the mediation of an estate agent. Approximately half of the homes in the Netherlands change owner without the mediation of an estate agent. Once you have agreed on the purchase price, the purchase contract is drawn up. Lastly, the notary arranges for the transfer of ownership and the execution of the mortgage deed.

Cohabitation contract

Often buying a home is a good opportunity to arrange other important financial affairs at the notary as well. For example, cohabitants who are not married can have a cohabitation contract drawn up. A cohabitation contract regulates the ownership of the house and the household contents and the conditions of a will. This will prevent financial ambiguities in the event of divorce or death of one of the partners. This also allows you to make provisions regarding the payment of inheritance tax over an insurance payout after death

Wills

Many people have a will drawn up when they buy a house. After all, your own home is a substantial capital asset. If you have children, it is advisable to instruct the notary to draw up a ‘survivor’s will’. Such a will stipulates that after the death of one of the partners, the entire estate is to go to the other partner. Although the children are entitled to their share of the estate, they will only receive it after the death of the surviving parent or partner. This prevents the children from immediately claiming their inheritance and compelling the surviving parent or partner from taking out a(n) (additional) loan on the house or selling the house. If you are or getting married in the Netherlands the abovementioned is arranged automatically.

Value of the house

A valuation is an estimate of the (sale) value of a house. The valuation reviews the nature and size of a house, the state of maintenance and the area. Since the valuation value of the house is also of importance for obtaining the mortgage, it is advisable to arrange the valuation in consultation with De Hypotheker. With regard to the mortgage, the report must be drawn up by an impartial valuer (i.e. one who is not involved in the purchase or sale of the property in any other way).

Structural survey

Structural survey If you are looking at buying an older house, we recommend to have a structural survey carried out regarding the quality of the house. Such a survey will reveal hidden defects such as leaks or the presence of woodworm. A valuation report and a structural survey report will give a clear picture of the value of the house.

If you wish to be eligible for the Nationale Hypotheek Garantie (National Mortgage Guarantee) when purchasing a flat or house and the valuation report indicates that the overdue maintenance to the house is higher than 10%, you are required to obtain a structural survey.

De Hypotheker will be happy to tell you more about this. De Hypotheker can also recommend a good structural survey firm. This will give you a fast and expert insight into the condition of the house you are interested in.

Completion inspection

If you are buying a new build home, you can instruct an impartial party to carry out an inspection. At the time of completion all essential components of your house will be thoroughly inspected. It is usually much easier to properly resolve problems when you point out defects directly to the builder. Your personal adviser at De Hypotheker can give you more information on this issue and arrange a completion inspection for you.

Purchase contract

If all parties have agreed on a purchase price, a purchase contract will be drawn up. The following data will be included in this contract:

• The agreed purchase price.
• Who is buying what.
• The intended transfer date.
• The dissolving conditions.
• The date on which the dissolving conditions will lapse.

This contract will be signed by both parties. The estate agent usually arranges the meeting. Once the contract is signed by both parties, buyers have three days to reconsider during which the purchase can be dissolved without consequences. After that period there usually is a fee of 10% of the purchase price for breach of contract.

Dissolving conditions

Deciding not to go ahead with the purchase without having to pay a penalty is only possible if dissolving conditions are included in the purchase contract. Examples of these conditions are:

• You cannot arrange the financing.
• You are not eligible for the Nationale Hypotheek Garantie.
• The municipality will not not issue you a housing permit.
• A reservation in the structural survey.

Nationale Hypotheek Garantie (NHG – National Mortgage Guarantee)

A mortgage with the Nationale Hypotheek Garantie (NHG) offers more security. For instance, when you are no longer able to pay your mortgage through no fault of your own. If you sell the property and you are left with a residual debt, the Stichting Waarborgfonds Eigen Woning can help you find the best possible solution. Let De Hypotheker inform you how you too can qualify for this guarantee. Or take a look on our website page ‘Is NHG an option for me?’ at hypotheker.nl

Rent or buy, What do you prefer?

Should I buy or rent? We all want to live as economically as possible, but in the meantime the house prices and rents keep going up. What is your best option, considering your personal situation? Below we have made an inventory of all the advantages and disadvantages of buying and renting.

Advantages of renting

•  You are not tied down. Often there is only a month’s notice on the lease. Should you decide to take a trip around the world, you can leave in a month.

•  The landlord is responsible for maintenance and repairs. In other words, no bother with contributions to the owners’ association’s savings account or    having to pay vast sums of money for roof maintenance, for instance.

Disadvantages of renting

•  All the rent money you pay is lost. You don’t accumulate any capital with your home.

•  If you earn too much money to qualify for social housing, you can only rent in the private rented sector. These rents can be quite high.

• Your rent can be increased annually. The rent increase depends of your joint household income and the annual rate of inflation. In 2018 the maximum annual rent increase is anywhere from 2.4% to 5.4%. In time, annual rent increases can amount to quite a bit.

• Home improvement? The landlord is the only one who profits. You are not investing in the value of the house and you will not get your investment back when you leave the house.

Advantages of buying

• Buying a house can stabilise your monthly expenses. You decide which option is best suited to your needs. Paying the same amount for the next 30 years, of paying more later when you are probably earning more? Not a problem.
• Once your mortgage is paid off, the house is yours. You have no more housing expenses, leaving you with more money for other activities.
• All improvements increase the value of your house: a new central-heating boiler, putting in a new floor, window frame maintenance, etc. It all makes the price of your house go up.

Disadvantages of buying

• What happens to the interest rate once the fixed-interest period expires? Predicting that is tricky. It can cause uncertainty, but also offers the chance of lower monthly expenses if interest rates keep decreasing.
• You have to pay for all repairs and maintenance. If you own a flat and it concerns the building, the owners’ association’s savings account will pay for it. However, you have to pay for all repairs and maintenance inside your flat. But remember: all improvements to your home will increase its value.