Purchasing a house in The Netherlands: how we can help with placing a bid without a financial clause

With the housing market in The Netherlands overheating again, many client are asking if they can place an offer without a financial clause for a pending mortgage approval. In this tight market this can make the difference whether or not you are successful with a bid. There is nothing more annoying then having the best offer but another competitor takes the price with a lower offer simply because they did not have any conditions on it. Well, we have some good news for you. With our special priority services clients can place an offer without financial conditions. Let us explain how it works.

How does a financial clause work?

 

When your bid on a property is accepted, the seller’s agent or the notary will draft a purchase agreement. Once you sign this, you legally always have three days in which you can still back out or change your mind without a penalty. After that the penalty could be 10% of the purchase amount.

 

As the mortgage is normally not approved in three days, a mortgage advisor or agent will recommend you to put in a condition on your offer that you require three or four weeks to get your mortgage approved. During this period if you mortgage gets declined, you can back out without a penalty. So the financial clause is there to protect the buyer, but it leads to uncertainty for a longer period of time for the seller.

 

If you’re not sure if you can get a mortgage approved for the purchase amount, bidding without a financing condition is quite risky. However, in this market, it is a popular option at the moment. It makes your bid much more attractive: the seller is almost certain that their house will be sold in just three days. It’s therefore common for sellers to prefer the offer without conditions, not necessarily even the highest bid!

 

Why can you remove the financial clause if you work with Independent Expat Finance?

 

Our company has access to almost all mortgage providers in The Netherlands. But with two of the biggest providers, ABN AMRO Bank and ING Bank, we have a priority service. This means that once we submit a complete mortgage application to either, we have an agreement with them that they will review the application on the next business day at latest. Good preparation is important but if we have all the documents necessary for the application ahead of signing the purchase agreement, we could get an approval a day later. Or at the worst, we have feedback of the mortgage provider if anything needs to be adjusted or extra documents are required. All of this within the three day cool off period. If it doesn’t work out, you can still withdraw from the purchase free of charge.

 

How can you make use of our priority service?

 

For starts, get in contact with via our website or phone number to schedule an intake session. During our intake session, it is one of the subjects we will discuss as there are some conditions for making use of this service.

 

For the priority service the secret lies in a good preparation on both the client side as well as on our end. Having all your income documents (also possible for entrepreneurs or self employed) ready and checked by us ahead of signing the purchase agreement is first of all necessary. Secondly, having a valuation report ready and or demonstrating you have sufficient savings to pay for any difference in the valuation vs purchase price is important. Then once we submit the application, it is our job to make sure the mortgage providers starts reviewing your application within the service level agreement.

Request a free intake meeting

 

If you would like to discuss the current housing market and mortgage landscape, you can always reach out to us or to Nick from Your Dutch Home for an online intake session. These sessions are always free of charge.







    Call me backSend me an e-mail

    We can advise you in

    following financial products

    Mortages

    On a mission to buy a house in the Netherlands? Let us help you get
    the keys to your new home!

    Insurances

    Reduce financial risks and get the support that you need. Getting the right insurance now may save you a lot of money in the future.

    Mortgage product explained: ABN AMRO’s Interest Reflection Period

    In the realm of mortgage financing in the Netherlands, ABN AMRO stands as one of the most prominent players in the market, offering a diverse range of mortgage products tailored to meet the needs of homebuyers. One notable feature that sets ABN AMRO apart is its inclusion of an interest reflection period on certain interest fixed terms in their offering. In this article we want to explain why it can be useful and how to take full advantage of it.

    When you are applying for a mortgage you will need to choose a fixed-rate mortgage and or a variable-rate mortgage. Over the last two years we have seen something interesting happen to mortgage interest rates. A 10 year interest fixed term rate on a regular mortgage went up rapidly from 1.5% to almost 5%. At the same time the shorter fixed terms like 1, 3 or 5 years as well as the variable-rate went up even further in some cases. That having been said, what should you do if you expect that within the coming years the rates will go down again? If you lock your rate for long you will either be stuck with it or have to likely pay a penalty to switch. If you go for a variable-rate or 1 year interest fixed term you will pay a high price at the moment and possibly only later will you benefit in case the rates go down but who knows when that will be.

     

    This is where the interest reflection period mortgage product can come into play. The interest reflection period is a distinctive feature embedded in certain ABN AMRO mortgage interest fixed terms, such as the 2, 3, 7 or 12 interest fixed term. It allows borrowers to periodically reassess and adjust their mortgage interest rates in the final 12 or 24 months of the interest fixed term. Unlike traditional interest fixed terms that lock in a specific interest rate for the entire term (which is also the case with ABN AMRO’s 5 or 10 year interest fixed term), the interest reflection period offers borrowers the opportunity to adapt to future changes in the financial landscape.

     

    Whilst writing this article ABN AMRO has a variable-rate of 5,40%. Their 1 year rate is 4,44% and 5 year rate is 3,47% (short term rates higher then longer terms we called inverted rates because normally it should be the other way around). Now ABN AMRO also has a 3 year rate of 3,79%, which is only slightly higher then the 5 year rate but significant better than the variable-rate or 1 year rate. And this 3 year rate also has a reflection period of 24 months. This means that in the final 24 months you can switch it to a different interest fixed term or variable-rate without a penalty. In that regard for us it does not make sense to consider their variable-rate or 1 year rate at the moment but rather their 3 year rate with the interest reflection period. On top of that we can also split the whole loan into different loan parts with a 3 year rate with the interest reflection period (giving you multiple options later) or after the first year is completed to switch it once more to a 3 year rate with an interest reflection period.

     

    So if market rates have decreased, borrowers may benefit from lower interest rates, potentially reducing their overall mortgage costs earlier. If the rates stay the same or go up, a borrower will likely wait till later in the interest fixed term or the final moment at the end to switch.

     

    ABN AMRO’s mortgage products with an interest reflection period provides a flexible and adaptive solutions to its customers. This unique feature empowers borrowers to navigate changing market conditions, ensuring that their mortgage remains aligned with their financial goals. As with any financial decision, prospective borrowers are encouraged to engage with our advisors to fully understand the implications of the interest reflection period and make informed choices that best suit their individual needs.

    Request a free mortgage intake meeting

     

    Give us a call or fill in our contact form below if you are interested to discuss further with one of our mortgage advisors







      Call me backSend me an e-mail

      We can advise you in

      following financial products

      Mortages

      On a mission to buy a house in the Netherlands? Let us help you get
      the keys to your new home!

      Insurances

      Reduce financial risks and get the support that you need. Getting the right insurance now may save you a lot of money in the future.

      Renting your home on Airbnb: understanding the rules in the Netherlands

      Renting out your own home on Airbnb sounds like an interesting opportunity to earn extra income right? But is it allowed without breaking any rules? In this guide, we’ll walk you through the regulations that apply.

       

      At present, the Netherlands boasts over 75,000 available Airbnb accommodations. While this benefits tourists, it can pose challenges for municipalities and residents, occasionally leading to disturbances from an influx of tourists in residential areas. For a long time, there was no clear legislation regarding renting out your property on Airbnb. However, since 2021, a significant change took place with an amendment to the Housing Act, specifically the Tourist Rental of Residential Space Act. This amendment empowers municipalities to intervene if necessary, considering the liveability of the residential environment.

      What actions can municipalities take to regulate Airbnb rentals?

       

      • Registration Requirement: Offering residential space without a registration number is strictly prohibited, aiding efficient enforcement.
      • Nightly Limits: Some municipalities, such as Amsterdam, have imposed a maximum of 30 nights per year for rentals.
      • Notification Obligation: Landlords may need to notify the municipality in advance, facilitating compliance checks.
      • Licensing Requirement: In addition to registration, landlords may need a permit for tourist rentals. This measure is applied when registration or notification obligations prove ineffective.

       

      The extent to which municipalities apply these measures varies, and those considering Airbnb rentals should check with their local municipality for specific guidelines.

      Other Considerations for Airbnb Rentals

       

      In addition to the municipal regulations, there are other factors to consider. You must be the owner of the property you intend to rent out. Renting out a property you’re leasing is generally not allowed unless you have permission from the owner and Owner’s Association.

       

      If you have a mortgage, you need to seek approval from your mortgage lender before renting out your property. The permissibility of renting out your purchased home on Airbnb depends on your mortgage terms and involvement with a Homeowners’ Association. Check your mortgage terms for any restrictions on renting out your property. Some banks, like ABN Amro, may prohibit long-term rentals, and interpretations regarding short-term rentals like Airbnb can vary.. It’s crucial to review the specific conditions of your mortgage provider.

       

      Homeowners’ Association: If you are part of a Homeowners’ Association, approval is typically required for commercial use of your property. Non-compliance may result in fines or legal consequences, as outlined in the association’s rules.

       

      For those without a mortgage or Homeowners’ Association affiliation, renting out your home on Airbnb is generally permissible, although regulations in Amsterdam may necessitate mandatory registration with the municipality.

      Do I Need to Pay Taxes When Renting Out My Home on Airbnb?

       

      When temporarily renting out your purchased home, the tax authorities consider this as income from your property. Such income falls under Box 1 (taxable income from work and home). You are required to add 70% of the rental income to your total income. However, you can deduct related expenses, such as cleaning costs and utilities.

      Example:

       

      You earn € 2.000,- by renting your home for two weeks. After deducting cleaning costs (€ 50,- each for pre and post-guest cleaning) and € 50,- for utilities, you have incurred total costs of € 150,-.

       

      Calculation: € 2.000,- € 150,- = € 1.850,-

       

      You are then required to declare 70% of this amount to the tax authorities.

       

      Final Calculation: € 1.850,- * 0.70 = € 1.295,-

       

      Ultimately, you need to add € 1.295,- to your taxable income derived from your property.

       

      In conclusion, while Airbnb can be a lucrative option, it is crucial to be aware of and adhere to the rules and regulations governing short-term rentals in your area, ensuring a smooth and lawful experience for both hosts and guests.

      Request a free mortgage intake meeting

       

      Give us a call or fill in our contact form below if you are interested to discuss further with one of our mortgage advisors







        Call me backSend me an e-mail

        We can advise you in

        following financial products

        Mortages

        On a mission to buy a house in the Netherlands? Let us help you get
        the keys to your new home!

        Insurances

        Reduce financial risks and get the support that you need. Getting the right insurance now may save you a lot of money in the future.

        Dutch mortgage interest rate expectations for 2024

        After a steep increase of mortgage interest rates in The Netherlands in 2022, last year was somewhat more stable. During 2023 mortgage interest rates fluctuated between 4% and 5%. Due to more stable mortgage interest rates in combination with inflation falling back, we saw home-buyers returning to the market. Looking forward, what can we expect the coming year?

        Inflation will return to lower values in 2023

         

        Mortgage interest rates are correlated to inflation. You could not have missed last years grocery store receipt or your energy bill. Thankfully over the last few months we see inflation in The Netherlands and EU dropping back to more normal levels. The expectation now is that the European Central Bank (ECB) will closely keep watching inflation in the next few months in the hope it will return to around 2%.

        Capital market interest rates

         

        The ECB is trying to lower the inflation in the whole eurozone to around 2%. This is their foremost goal but seems to be put in motion at the moment. Sometimes it is difficult as different countries in the EU have different levels of inflation or other struggles. If the ECB is assured that inflation will reach the target levels they will slowly start decreasing interest rates again. Potentially we could see this happening in the second half of 2024.

        What will mortgage interest rates in 2024 do?

         

        Mortgage advisors always keep an eye on the capital markets and government bonds for 10 years fixed. This rate is a good indicator for mortgages with a longer interest fixed term. In the last 3 months we see a significant drop from 3,3% to 2,5% for 10 year government bonds. Over the past few weeks we have seen Dutch mortgage providers such as ABN AMRO, ING or Rabobank drop their mortgage interest rates several times. This is especially the case for medium and longer interest fixed terms such as 5, 10 or 20 years. Variable interest rates remain high at the moment. We expect in the remainder of the year rates to stabilize again and towards the summer they could start dropping.

        Should you buy a property now?

         

        With interest rates having stabilized and home buyers returning to the market, we see prices are starting to increase again. For some properties that either look beautiful or are in the right city or neighbourhood you need to dig deep. With that we mean overbidding amounts of 25.000,- to 75.000,- euro on top of the listing prices is happening again. However, it is not true for all properties yet as we see some still on the market for a longer period of time and a price can be negotiated with the seller. Overall conditions are favourable to buy a home in The Netherlands and we expect a price increase of 3% to 6% for 2024.

         

        The limit for NHG mortgages also increased to 435.000,- euro and if you are under 35 the starter exemption on transfer tax now applies to home purchases up to 510.000,- euro. Both the lower NHG rate compared to a normal mortgage rate and the lower one-off transfer tax present interesting opportunities.

         

        Also for home-owners that have recently bought a home but have higher interest rates it is not all bad. With rates heading lower at the moment, your home will likely become worth more and if you ever want to move to a next home in The Netherlands you can always cancel your mortgage without a penalty upon sale and apply for a new mortgage once again but then with hopefully lower rates.

        Request a free mortgage intake meeting

         

        Give us a call or fill in our contact form below if you are interested to discuss further with one of our mortgage advisors







          Call me backSend me an e-mail

          We can advise you in

          following financial products

          Mortages

          On a mission to buy a house in the Netherlands? Let us help you get
          the keys to your new home!

          Insurances

          Reduce financial risks and get the support that you need. Getting the right insurance now may save you a lot of money in the future.

          Higher maximum mortgage with a better energy label

          In 2024, the maximum mortgage will increase if you purchase a home with a better energy label. On the other hand If you buy a home with a poor energy label, you can borrow less than is currently the case. For a highly energy-efficient home, the difference can be up to € 50.000,-. Additionally, the loan options for energy-saving measures will also change.

          Every euro you spend on your energy bill is one euro less you can spend on your mortgage. For this reason, from 2024, your maximum borrowing capacity will be linked not only to your income, home value, and mortgage interest rate but also to the energy label. This ensures that the maximum mortgage aligns better with the actual financial capacity households have. Likely this will also give another reason for home owners to install energy saving measures and obtain a better energy label.

           

          Those with a more energy-efficient home can spend more on a mortgage, allowing for a higher loan amount. For homes with labels C and D, this is € 5.000,-. It can go up to € 50.000,- if you have a home with an A++++ rating and an energy performance guarantee for at least ten years. The table below shows the effect for other energy labels.

          Energy label of the home Extra amount that can be borrowed
          E, F, G € 0,-
          C, D  € 5.000,-
          A, B € 10.000,-
          A+, A++ € 20.000,-
          A+++ € 30.000,-
          A++++ without energy performance guarantee € 40.000,-
          A++++ with a 10-year energy performance guarantee € 50.000,-

          Suppose you have your eye on a home that is priced at € 390.000,-. The property is appraised at € 400.000,-. Based on your income, you can only borrow a maximum of € 375.000,-. Because the home you’re interested in has a label B, you can borrow an extra € 10.000,-. Now you only need to pay € 5.000,- from your own pocket instead of € 15.000,-. However, if the appraised value of the home is € 375.000,- then that remains the maximum loan amount. You cannot borrow more than the property value.

           

          If you want to make your home more energy-efficient, this year you can, under certain conditions, borrow an additional € 9.000,- for that purpose. In 2024, the extra loan amount will depend on the energy label. For homes with a lower energy label, you can borrow more (maximum € 20.000,- with E, F or G label) compared to homes with a better energy label (minimum € 0,- with A++++ label). What remains the same is that the additional amount to be borrowed is deposited in an energy saving measures fund account with the mortgage provider. This ensures that the extra loan amount is actually used for the sustainability of the home.

           

          If we go back to the previous example, in 2024, you can borrow a maximum of € 385.000,-. When you want to make the home more sustainable after the purchase and meet the conditions, you can borrow an additional € 10.000,-. However, this € 10.000,- is placed in an energy saving measures fund. So, you still need your own money to cover the remaining € 5.000,- for the purchase. Also don’t forget the buyer’s costs either.

           

          Considering buying a home? A logical first step in the buying process is knowing how much you can borrow. This allows you to search for a home more effectively. Curious about how much you can borrow in 2023 and how the situation will change in 2024? We’d be happy to map it out for you. Feel free to contact us via the form below.

          Book a free mortgage intake meeting

           

          Our team of mortgage advisors is ready to assist you in finding the right mortgage. Contact us today for a no-obligation consult and discover the many options available to you.







            Call me backSend me an e-mail

            We can advise you in

            following financial products

            Mortages

            On a mission to buy a house in the Netherlands? Let us help you get
            the keys to your new home!

            Insurances

            Reduce financial risks and get the support that you need. Getting the right insurance now may save you a lot of money in the future.

            The Impact of Mortgage Interest Rates on Dutch Housing Prices

            Mortgage interest rates have a significant influence over housing prices in the Netherlands, a country celebrated for its picturesque landscapes and vibrant cities. In this article, we’ll examine how changes in mortgage interest rates reverberate through the Dutch housing market, shaping the decisions of both buyers and sellers.

             

            The Dutch housing market is characterized by competitiveness and dynamism, especially in cities like Amsterdam, Rotterdam, and Utrecht. This results from soaring demand, urbanization and a limited housing supply, creating an environment prone to price fluctuations.

            Affordability

             

            One of the immediate consequences of fluctuating mortgage interest rates in the Netherlands is their impact on housing affordability. Lower interest rates translate into more affordable homeownership, as reduced monthly mortgage payments beckon buyers. Conversely, rising interest rates squeeze affordability. Increased monthly mortgage costs can deter potential buyers, potentially leading sellers to lower their asking prices, thus exerting downward pressure on housing prices.

            Demand and Supply

             

            Mortgage interest rates wield a pivotal influence on the equilibrium between housing demand and supply in the Netherlands. Low rates stimulate demand, often triggering bidding wars and price surges. Between 2020 and 2022 this was happening and it was not uncommon bid were up to 100.000,- euro over the asking price. Conversely, rising rates can depress demand, slowing down price growth and compelling sellers to reassess their pricing strategies. Last year interest rates shot up from 1.5% to 4.5% and this had a big effect on the prices. 

            Investment and Speculation

             

            Interest rate fluctuations significantly impact real estate investment and speculation in the Dutch housing market. Low interest rates lure investors seeking higher returns, ultimately driving housing prices upward. Between 2017 and 2022 we had many clients interested in buy to let properties. Conversely, rising rates may discourage investors, potentially cooling the market and moderating price escalations.

            Government Policies

             

            To manage potential market instability, the Dutch government has implemented various policies. Measures like loan-to-value (LTV) and loan-to-income (LTI) limits are in place for a few years to restrain excessive borrowing and ensure financial stability. More recently many municipalities require you to live in a property for at least 4 years before you may rent it out. This year some additional measures are being taken, increasing the transfer tax to 10.4% for purchasing second homes or investment properties and higher taxes on property assets.

            Conclusion

             

            In summary, changes in mortgage interest rates have a significant influence over Dutch housing prices. These fluctuations impact affordability, demand and supply dynamics, investment and speculation, and government policies. For all stakeholders in the Dutch real estate sector—buyers, sellers, and investors—it is important to monitor interest rate changes closely as they signify the intricate interplay between financial and housing markets in the Netherlands. With current mortgage rates three times what they were last year some home buyers are hesitant to buy.

             

            That being said the market is slightly less competitive so easier to close a deal without substantial overbidding. If it aligns with a home buyers risk profile, we are often advising to lock interest rates for periods of 3, 5 or 7 years instead of 10 or 20 years. If interest rates would drop in the coming years these clients will benefit from a possible increase in housing prices as well as being able to get a better interest rate without or with less of a penalty.

             

            During an intake meeting our advisors address these topics, so send us a message to schedule an appointment.







              Call me backSend me an e-mail

              We can advise you in

              following financial products

              Mortages

              On a mission to buy a house in the Netherlands? Let us help you get
              the keys to your new home!

              Insurances

              Reduce financial risks and get the support that you need. Getting the right insurance now may save you a lot of money in the future.

              How do variable mortgage interest rates work?

              For many people, purchasing a home is one of the most significant financial investments they will make in their lifetime. In the Netherlands, like many other countries, one of the primary methods of financing a home purchase is through a mortgage. A mortgage is a loan obtained from a financial institution to buy a property and there are different types of mortgage interest rates available. Among them, variable mortgage interest rates are an option that appeals to certain borrowers due to their unique features and potential advantages.

               

              In this blog, we will explore how variable mortgage interest rates work in the Netherlands, along with their pros and cons.

              How Variable Mortgage Interest Rates Work:

               

              A variable mortgage interest rate, also known as a floating rate or adjustable rate, is a type of interest rate that fluctuates over time in response to changes in the market interest rates set by the European Central Bank (ECB) or other benchmark rates. The rate can vary at specific intervals, which are usually determined by the mortgage provider, and can be influenced by economic conditions, inflation rates, and other factors affecting the financial markets.

              Pros of Variable Mortgage Interest Rates:

               

              • Lower Initial Rates: One of the primary advantages of a variable interest rate is that it often starts lower than fixed-rate mortgages. This can be attractive to homebuyers, especially when market interest rates are relatively low. Lower initial rates mean lower initial monthly payments, making it easier for borrowers to manage their finances at the beginning of the mortgage term. Currently in the Netherlands we see that with most mortgage providers the variables rates are higher than fixed term rates, so called inverted rates.

               

              • Potential Savings: If market interest rates decrease over time, borrowers with variable mortgages can benefit from lower monthly payments without having to refinance their loans. This potential for savings can be advantageous, particularly for those who plan to stay in their homes for a shorter period.

               

              • Flexibility: Variable mortgage interest rates offer borrowers more flexibility than fixed-rate mortgages. If a homeowner expects interest rates to decrease in the near future, a variable rate can be a suitable option.

               

              • Early Repayment: Variable mortgage loans often allow borrowers to make early repayments without incurring significant penalties. This feature provides more freedom for borrowers who may wish to pay off their mortgages sooner, reducing the overall interest paid.

              Cons of Variable Mortgage Interest Rates:

               

              • Uncertain Payments: The most significant drawback of a variable interest rate is its uncertainty. Monthly payments can fluctuate, making budgeting and financial planning more challenging for borrowers, particularly those on fixed incomes or tight budgets. A sudden increase in interest rates could lead to substantially higher monthly payments.

               

              • Less borrowing capacity: due to the extra risk element a variable interest rate allows you to borrow less on your income than with a interest fixed term of 10 years or more. If you are buying well within your budget this does not matter much, but for clients looking to borrow on their limit it does.

               

              • Potential Higher Rates: While a variable interest rate can start lower than fixed rates, there is also the risk that it could rise significantly over time. This could lead to higher long-term costs for the borrower compared to a fixed-rate mortgage.

               

              • Market Volatility: Variable mortgage interest rates are directly linked to market conditions and are influenced by external factors that borrowers cannot control. Economic changes, inflation, or global events can lead to unpredictable fluctuations in interest rates.

               

              • Psychological Stress: The uncertainty surrounding variable rates can cause stress and anxiety for some borrowers, especially those who prefer stable and predictable financial arrangements.

               

              • Limited Options: In the Netherlands, variable mortgage interest rates are less common compared to fixed-rate mortgages. As a result, borrowers may have fewer mortgage providers and products to choose from when opting for a variable rate.

              Conclusion:

               

              Variable mortgage interest rates in the Netherlands can be an appealing option for certain borrowers due to their potential for the opportunity for savings if interest rates decrease. However, these advantages come with the trade-off of uncertain payments and the possibility of higher rates in the future. Before choosing a mortgage type, prospective homebuyers should carefully assess their financial situation, risk tolerance and future plans to determine whether a variable interest rate aligns with their needs and preferences.

               

              Seeking advice from our mortgage advisors can be beneficial in making an informed decision. Remember, regardless of the chosen mortgage type, responsible financial planning is key to successful homeownership.







                Call me backSend me an e-mail

                We can advise you in

                following financial products

                Mortages

                On a mission to buy a house in the Netherlands? Let us help you get
                the keys to your new home!

                Insurances

                Reduce financial risks and get the support that you need. Getting the right insurance now may save you a lot of money in the future.

                Property Valuation Alternatives for Expats Buying a House in the Netherlands

                Your agent just let you know your offer has been accepted for your Dutch dream house. Next up is arranging your mortgage. One crucial step that is often arranged through your mortgage advisor is obtaining a property valuation for your mortgage application. The reason why mortgage providers require this is because they want to be sure what the real value of the property is. If you placed a really high offer, the real value will perhaps be lower than what you offered.

                 

                In this article we will inform you about the different valuation alternatives available, along with their pros and cons, as well as associated costs.

                Option 1: Independent Appraisal (Market Value Report)

                 

                Opting for an independent appraisal involves hiring a certified appraiser to assess the property’s value. This method provides an unbiased and professional opinion on the market worth of the house. The appraiser considers various factors such as location, condition, size, and recent property sales in the area. This information is published in a report and checked by an organization called NWWI for completeness and accuracy. Independent appraisals are recognized by mortgage lenders and are typically required for mortgages exceeding a certain loan-to-value ratio such as 100% financing.

                 

                Pros:

                 

                • Accepted by all mortgage lenders.
                • Generally the most accurate value.
                • Can include renovations / value after renovations in the report.

                 

                Cons:

                 

                • Higher cost compared to other valuation alternatives (expect 700,- to 800,-euro).
                • Requires finding and hiring a certified appraiser independently.
                • May prolong the mortgage application process (can take up to 3 weeks before you get the report).

                Option 2: Desktop (Hybrid) Valuation

                 

                A desktop valuation, recently becoming available and gaining popularity in The Netherlands, is a property valuation method that is conducted remotely without physically inspecting the property. Instead of an on-site visit, the valuation is based on available data and information about the property, such as its size, location, condition, and recent comparable sales in the area. Desktop valuations are typically performed by licensed appraisers or valuation experts who analyse property databases, market trends, and other relevant information to estimate the value of the property. They may also use advanced software and algorithms to aid in the valuation process.

                 

                This type of valuation is commonly used for properties that are relatively straightforward, such as standard residential houses or apartments. Buyers often choose this alternative when the cost of conducting an on-site appraisal is deemed unnecessary or impractical.

                 

                Pros:

                 

                • Desktop valuations offer convenience as they can be conducted remotely without the need for the appraiser to physically visit the property.
                • Desktop valuations are completed much faster (within a few business hours).
                • It costs between 70,- and 90,- euro.

                 

                Cons:

                 

                • The desktop valuation is specific for one mortgage provider as they have different policies on this, so you need to know upfront to which provider you will submit your mortgage application.
                • Generally desktop valuations are only accepted for mortgage applications with loan-to-value ratios below 90%.
                • In some cases a desktop valuation is not possible if there are not enough similar properties that can be remotely compared.
                • Properties with unique characteristics, extensive renovations, or significant structural issues may require an on-site appraisal to provide a more accurate or higher valuation.

                Conclusion:

                 

                Obtaining a property valuation is an essential step when buying a house in the Netherlands. While there are different valuation alternatives available, each with its own pros and cons, it’s important to consider the requirements of your mortgage application and your specific circumstances. Independent appraisals are reliable and offer the most accurate assessment of a property’s worth, while the desktop valuation is cheaper and more time-efficient. Understanding these alternatives and their associated costs will empower expats to make informed decisions throughout the home buying process.







                  Call me backSend me an e-mail

                  We can advise you in

                  following financial products

                  Mortages

                  On a mission to buy a house in the Netherlands? Let us help you get
                  the keys to your new home!

                  Insurances

                  Reduce financial risks and get the support that you need. Getting the right insurance now may save you a lot of money in the future.

                  Understanding Nationale Hypotheek Garantie (NHG) for Expats in the Netherlands

                  We understand that navigating this country’s mortgage market is not an easy task for expats living in The Netherlands. One important aspect to consider when buying a home here and applying for a mortgage is the Nationale Hypotheek Garantie, commonly referred to as NHG. NHG is a mortgage guarantee scheme designed to provide financial security to borrowers and lenders.

                   

                  In this blog, we will explore what NHG is, its benefits, and how it can be beneficial for expats looking to buy a home in the Netherlands.

                  What is Nationale Hypotheek Garantie (NHG)?

                   

                  Nationale Hypotheek Garantie, translated as National Mortgage Guarantee, is a guarantee scheme introduced by the Dutch government to promote responsible lending and homeownership. The primary objective of NHG is to protect both borrowers and lenders in the event of mortgage default, offering security and favourable terms for borrowers and reducing the risk for lenders. In our clientele it is often first-time buyers that are applying for a NHG mortgage.

                  Benefits of NHG for Expats:

                   

                  Lower interest rates: One of the significant advantages of NHG is that it often allows borrowers to secure lower interest rates compared to regular mortgages without NHG. In regular mortgages without NHG it is the loan-to-value ratio that determines your interest rate with a mortgage provider. Often first time buyers are want to borrow 100% of the property value and their rate will be higher than in case they would put down a large down payment. The reason is that with a lower loan-to-value ratio there is less risk for a mortgage provider. NHG mortgage are generally classified in the utmost lowest risk category and having a mortgage with NHG can result in substantial long-term savings, making homeownership more affordable for expats.

                   

                  With NHG, expats may have the opportunity to borrow a larger amount, as lenders typically take the lower risk associated with the guarantee into account. This can be particularly beneficial for those looking to purchase a higher-priced property or for those with limited funds for a down payment.

                   

                  NHG also offers more favourable terms than with a regular mortgage for home-buyers. For example with NHG, if you can no longer afford to live in your property due to a divorce, unemployment, disability or partner death, and you are forced to sell your property but at a lower price than your outstanding mortgage debt, they could arrange a debt reduction or pardon with the mortgage provider.

                  Eligibility for NHG:

                   

                  To be eligible for NHG, expats must meet specific criteria, including:

                   

                  1. Maximum property value: The property’s value must fall within the NHG limits, which are revised annually. It is important to consult with one of our mortgage advisors to determine the current limits.
                  2. Maximum mortgage amount: The NHG guarantee has a cap on the mortgage amount, which is also adjusted annually. The maximum mortgage amount takes into account the value of the property and possible renovations or energy saving measures.
                  3. Primary residence: NHG is only available for borrowers who intend to use the property as their primary residence. It is not applicable to second homes or investment properties.
                  4. Mortgage affordability assessment: Expats must undergo a thorough affordability assessment by the lender to ensure they can comfortably repay the mortgage. The assessment typically considers factors such as income, expenses, and existing debts. An NHG mortgage application is generally more strict than a regular mortgage application.

                   

                  There is however a downside to NHG mortgages, its not for free. You have to pay a one-off commission for NHG that is 0,6% of the initial mortgage amount. Like some other mortgage related expenses, this commission is tax deductible. For most clients this commission is earned back within three years. If you are not sure if you plan to stay in The Netherlands that long, you could opt to skip NHG for that reason.

                  No-obligations mortgage meeting

                   

                  For expats planning to buy a home in the Netherlands, understanding the benefits of Nationale Hypotheek Garantie (NHG) is important. NHG offers various advantages, including lower interest rates, increased borrowing capacity, and enhanced security for lenders. By meeting the eligibility criteria and securing an NHG-backed mortgage, expats can enjoy favourable loan terms and greater peace of mind. To explore NHG options further, it is recommended to consult with our mortgage advisors who can provide personalized guidance based on individual circumstances.







                    Call me backSend me an e-mail

                    We can advise you in

                    following financial products

                    Mortages

                    On a mission to buy a house in the Netherlands? Let us help you get
                    the keys to your new home!

                    Insurances

                    Reduce financial risks and get the support that you need. Getting the right insurance now may save you a lot of money in the future.

                    Unlocking your dream home: Why Expats in The Netherlands choose Independent Expat Finance for mortgage advice

                    Dear Home Buyers in The Netherlands,
                    Congratulations on embarking on the exciting journey of finding your dream home! As you navigate through the process, it’s crucial to make informed decisions, especially when it comes to securing a mortgage. While you may be tempted to go directly to a bank for your mortgage needs, we advise you to consider the invaluable benefits of utilizing Independent Expat Finance, an independent mortgage advisor specializing in serving expats. Allow me to highlight a few compelling reasons why this choice can significantly enhance your home buying experience.

                    Our way of working

                     

                    First and foremost, Independent Expat Finance works exclusively for you, the home buyer. Unlike a bank representative who is primarily focused on promoting their institution’s products, Independent Expat Finance is your advocate. Our primary goal is to find the best mortgage solution tailored to your specific needs and financial situation as an expat. This personalized approach ensures that your interests as an expat are the top priority throughout the entire process.

                    One of the most significant advantages of Independent Expat Finance is our extensive network of lenders specifically catering to expats. While banks offer their own mortgage products, Independent Expat Finance has established relationships with over 40 lenders. This access to a specialized pool of lenders allows us to compare multiple options. By leveraging our network, we increase your chances of finding the most competitive interest rates, favourable repayment terms, and potentially saving you a substantial amount of money over the long term.

                    Discovering the Dutch mortgage market


                    Navigating the mortgage landscape as an expat can be complex and overwhelming, especially in a foreign country like The Netherlands. Independent Expat Finance possesses the expertise and knowledge to guide you through the maze of mortgage options tailored to expats. We will explain the details, answer your questions, and ensure you have a clear understanding of the terms and conditions associated with each mortgage possibility. With our guidance, you can make well-informed decisions, empowering you to select the mortgage that aligns with your financial goals and aspirations as an expat.

                    Furthermore, Independent Expat Finance can help streamline the entire mortgage application process for expats. We understand the unique documentation requirements and challenges that expats face and will assist you in gathering the necessary paperwork, ensuring a smooth and efficient process. We will also handle the communication between you and the lender, saving you time and reducing the stress associated with navigating the bureaucratic procedures independently. With our expertise in expat finance, you can navigate potential roadblocks with ease, minimizing any delays and maximizing your chances of securing your dream home.

                    Independent Expat Finance for your support 


                    Finally, Independent Expat Finance offers ongoing support even after you’ve obtained your mortgage. As an expat, you may encounter unique financial situations or changes in your expat status. Independent Expat Finance can provide valuable advice on various aspects, such as refinancing options, early repayment strategies, or switching your mortgage to a buy-to-let product. We also advice our clients on damage or risk insurances. By maintaining a long-term relationship, we become a trusted resource you can turn to for any mortgage-related queries as an expat, ensuring that you always have an expert by your side.

                    In conclusion, choosing Independent Expat Finance over going directly to a bank offers an many benefits that can make a significant difference in your home buying journey as an expat in The Netherlands. With our personalized service, access to a specialized pool of expat lenders, expertise in expat finance, and ongoing support, we provide the guidance and peace of mind you deserve as an expat.

                    Remember, buying a home as an expat is a monumental decision, and it’s essential to make choices that align with your best interests as an expat. By selecting Independent Expat Finance, you are taking a proactive step towards securing the most favourable mortgage terms and ensuring a smooth and enjoyable home buying experience as an expat in The Netherlands.

                    Wishing you all the best in finding your perfect home!







                      Call me backSend me an e-mail

                      We can advise you in

                      following financial products

                      Mortages

                      On a mission to buy a house in the Netherlands? Let us help you get
                      the keys to your new home!

                      Insurances

                      Reduce financial risks and get the support that you need. Getting the right insurance now may save you a lot of money in the future.