Mortgage advice for expats – Get your ducks in order. It’s a process.
Mortgage advice for expats – The good news is that financial institutions are much more open to lending to expats than they used to be. Yes there will be costs involved, but getting a mortgage and being a homeowner makes so much sense on every level. Renting is dead money and you do not own the asset. Arranging the mortgage and buying a home is the way to go, even in what seems an expensive housing market. Interest rates are still at historical lows too.
Getting a mortgage is a process. If you respect the process and are reasonably well organised you will reach your goal. Like any Dutch person, you can do the process on your own, however a lot of the process is in Dutch, so it will be smoother if you use a mortgage adviser. Expat Mortgages has refined the process into 7 easy steps.
1. Determine your Budget
It might seem obvious, but you need to know what you can afford to borrow before even looking at homes for sale. An adviser can help you to assess what you can actually afford and what your maximum budget is. This then will realistically let you start looking for homes and start making offers. The market moves so fast, that you need to move fast too. Having the right information will allow you to do that. You will then know what your fixed monthly mortgage costs will be depending on the product and the term of the contract.
2. Start visiting homes for sale that you want to live in.
“Ooh, look at this one, it has a roof terrace.” Or, “This one has a man cave!”. Or, “I need that walk in wardrobe!” These are the kind of things you will be saying as you start the property search. Online resources like Funda or VBO are great. Or go in the Estate Agents offices and talk to them. The internet sites did not replace them ! One massive advantage is that they will be aware of stock that is coming onto the market through their deep local knowledge. They will do the visits with you and advise you on the pros and cons of the properties. Their fee will be between 1 – 1.75% of the sale price excluding VAT.
3. The Bid and the Purchase
You will most likely be bidding for a whole house or an apartment. If you win the bid and sign a purchase contract you have the right to cancel within 3 days. This is the cooling off period. You do not need to give an excuse for cancelling it. Then the purchase will usually be subject to you getting finance.You will be using a notary to make sure of all the legal matters in the transfer of ownership. As a guide, roughly 6% of the purchase price will be added as buyer costs. If things are all clear and moving forward you will need to put 10% of the sale value in the notary’s escrow account. Then the purchase will usually be subject to you getting finance.
Also, on most homes for sale you will see the letters ‘KK’. This means Kosten Koper (buyers costs) or that the buyer pays the related costs of the purchase. As a guide, these costs are roughly 5-6% of the purchase price and they include: the 2% transfer tax, the notary costs, the estate agents fees, the mortgage advice fee, registration costs, appraisal and valuation reports, as well as interpreter. If things are all clear and moving forward you will need to put 10% of the sale value in the notary’s escrow account or you can ask the bank to guarantee this for you. The typical timescale for that is 4 – 6 weeks. Your adviser will set all this out for you in plain English so that there are no surprises.
4. Preparing your mortgage application.
For every mortgage application the process may look slightly different and the bank may require additional documents. That is why Expat Mortgages advises that you start early and have everything prepared before your bid gets approved. This way you will have enough time and assure you won’t miss any important deadlines. Being prepared is a key element in the process.
5. The Notary
A civil law notary is the only person that can transfer the ownership of a home in The Netherlands.He is also the one arranging the mortgage deed and the agreement you will have with the bank in regards to the property. Expat Mortgages uses a wide network of partners and if you urgently need to find a notary, do not hesitate to ask them for advice.
At the day of transfer, in case you are not fluent in Dutch, you are obliged to have an interpreter. That is a person that speaks your mother tongue and who is translating everything that the notary will read and ask you to sign. The notary is the one who receives all the invoices and paying all the parties (the afore mentioned buyers costs)
6. Your Tax position as a homeowner.
Good news ! Mortgage interest payments are tax deductible for your main residence in The Netherlands. For the 2 years of your mortgage, Expat Mortgages will arrange your refunds in this regard. They do not charge for that service. Done monthly, you will clearly then see the difference between your interest charges and the refund. Your financial position for the mortgage will be clear to you.
7. The personal touch.
Making the complicated simple is an art form. Expat Mortgages want your experience getting a mortgage to be a smooth and happy one. They will keep in touch with you and can provide other services and recommend partners for your changing financial positions. Moving on and need to sell your home ? They can help to make that happen too. Pensions ? Again, they know the right people. Getting the mortgage mortgage for you is a process and so it your continuing financial wellbeing and stability.
Expat Mortgages is a team of independent mortgage brokers for expats who want to buy a house in the Netherlands. The company already exists for more than 12 years and has provided mortgage advice to thousands of people from different nationalities. They only work with expats and this allowed them to become a specialist in what they do.
Expat Mortgages B.V.
020 717 3908
Barbara Strozzilaan 101
1083 HN Amsterdam
2033 AP Haarlem
The Hague Office
2506 AL Den Haag
3032 AC Rotterdam
Flight Forum 40
5657 DB Eindhoven