Mortgages: practical aspects
Mortgages are regulated in the Netherlands, which keeps houses affordable for many people in the current economic climate. There are multiple ways to get a mortgage for the house you want to buy. We explain below how to get one, and which conditions apply.
To get a mortgage, it is common in the Netherlands to seek assistance from a mortgage adviser. A mortgage adviser will talk you through various types of mortgages, how much you can receive based on your salary (and/or your partner's salary), arrange the paperwork in coordination with the various estate agents (makelaars), sort out the notary for you, and organise your tax credits (since your tax situation will change with the purchase of a house). They will also advise you on appropriate translation services to use for the official paperwork. The service will also suggest and organise a notary for you, who will notarise your signature on the final papers when that house becomes your home. There are costs involved, but you can meet the mortgage adviser and discuss your options before committing to the whole process.
What is the maximum mortgage I can get?
In most occasions, the bank will lend you a maximum of four times your individual salary. This income limit applies if you have a permanent employment contract; if you are self-employed, different conditions apply. For example, if you had a permanent contract earning €32,000 gross per year, a bank would lend you a maximum of €130,000. If you wanted to purchase an apartment for €162,000, you would need to provide €169,000 (€7000 in additional costs). Before searching for a new house, it is a good idea to know exactly how much you (and your partner) earn and can spend, and what your monthly costs will be after you purchase your house.
In order to start the mortgage process, you will need to provide a number of documents to the mortgage provider to prove your identity, income and residency. The documents you need to bring along to the first appointment include your most recent payslip or proof of income, your ID, and your BSN, as well as any necessary residency documents. The mortgage provider (or your mortgage advisor) will let you know when you need to bring these documents along as you move forward with the process.
Additional factors in taking out a mortgage
Getting a mortgage is not just a case of getting your finances sorted, although that is the biggest part. You will also need to take out house insurance and life insurance policies. A new life insurance policy generally requires you to take a physical (a basic physical examination by a doctor to check your health). If something changes in your personal situation, you will also need to inform the insurance company. If you fail to notify the insurance company according to the terms of the policy, they may not have to pay you the life insurance in some situations.
Your mortgage advisor will let you know about all your options and can also recommend policies. Please note that if you have agreed to buy a house, a clock starts ticking: from that point on, you have ten weeks to get all documents ready, including translations of the documents if you need them. All paperwork must be completed before the date of your appointment with the notary to sign the purchase documents. If you are unable to meet that deadline, you may not only be unable to complete the purchase, but may also be required to pay hefty fines to the bank. And in all cases, make sure to read the fine print in the contract very carefully.