Expat mortgages in the Netherlands
Expat Mortgages
Expat mortgage advice based on your personal situation and background being an expat. This approach is what makes us unique. The one stop shop method of Personce sees to it you receive independent financial expat mortgage advice combined with additional service based on your needs and wishes. We know the ins and outs of all possible mortgage banks on the market, both the larger nationally known banks and the smaller providers on the financial market. When we talk about a complete overview and offer, we mean really complete as we have access to the whole range of mortgage providers in The Netherlands.
As a financial advisor, we also think it is important that you know what you are signing up for. We guide you through the process of obtaining a mortgage based on your level of knowledge in a language you understand. We help you through the financing process, whether it concerns for example a mortgage for you as a first time buyer, a mortgage for renovation or a buy to let mortgage. A suitable financial planning solution for everyone, that is our goal.
Buying your first house
You are about to buy your first home! It is an exciting step to look for your dream house especially in the situation as a foreigner in a new country with lots of opportunities and challenges. Where to start? Do you need purchase guidance from a local real estate agent? What are the rules and regulations, are there restrictions purchasing property as an expat? Do I have to include a lot of my own savings to be able to buy? Are you wondering what steps you need to take and what you need to arrange before your first home is finally yours? The mortgage loan advisors at Personce will guide you step-by-step trough the mortgage process so you can focus on what is important for you.
Buying you next house
In the ideal scenario, you would sell your current home exactly as you sign the purchase contract for your new home. In practice this is almost never the case. Often you are faced with a difficult choice. Do you sell your current house first and then buy a new house? Or is it better to do it the other way around and first look for your new dream palace in the Netherlands before placing the 'For Sale' sign in your own garden? Personce will take in account what you prefer and what would be best choice in your personal tailor made mortgage advice.
There is something to be said for both situations. We list the pros and cons.
First sell your house, then buy another house
Some people choose this scenario because you don't have double mortgage payments if you already sold your house before you receive the keys to your new home. This scenario also gives you more certainty about your budget. Because you know the exact selling price of your house, you know exactly how much you have in residual debt or equity. However there are also disadvantages to this order. There is a chance that the buyers of your home will want to move into the home before you receive the key to your new home. You will have to make agreements about this together. In addition, it may be the case that you have sold your home, but you cannot find a new home.
With today's tight housing market, that is not inconceivable. A possible solution is to temporarily live in a rented house. There is also a possible tax disadvantage if you are considering taking your existing home finance with you to your next home. We wil give you tax advise about it. Especially if there is a long time between the sale of your home and the purchase of a new home. If you sell your home in 2022, you must move into your new home by the end of 2023 at the latest in order to be able to take your mortgage with you. At the current mortgage rates level in the Netherlands this probably will be interesting for the future. If you don not do that, you can no longer take your low mortgage interest with you, for example, and you cannot take any interest-only mortgage in the Netherlands with you while retaining the mortgage interest deduction.
First buy a new house, then sell
If you do not want to rush out of your current home to move into your new home, this scenario may be more convenient. You will then have plenty of time to renovate your new house and to pack things. You also know for sure that you have a new house that you can move into. So you do not have to rush home hunting. In this case, it is important that you can actually sell your current home quickly and that you can temporarily pay double housing costs. Your mortgage provider will only agree to this order if you can bear the double monthly mortgage payments for at least 12 months of your current home loan and bridge finance. To help you with this, it is possible to get mortgage interest deduction for both homes during the year in which you move out of your old home and three additional years. This is a nice windfall. An option could also be to temporarily rent out your current home. Please note that you have to take into account conditions from the government and your current home loan at your current mortgage provider.
A Bridging loan
When you temporarily have two homes, you can use a bridge finance to include the equity on your current home when financing your new home. This is a loan that you temporarily arrangement to finance your new home with the equity, while your current home has not yet been sold or paid for. Your mortgage broker can help you to arrange the bridge loan. After the sale of your house, you repay this credit with the proceeds of your current house. You can apply for this credit when you take out your new home finance. The interest you pay on the bridging loan is tax deductible. The mortgage rates for a bridging loan in the Netherlands are determined by the bank. The bride loan is available when you already sold your house and when you did not jet sold your current house. Ask Personce as your personal mortgage broker for specific mortgage advice in your situation.
What mortgage types are available in the Netherlands?
Linear mortgage, what is it?
A linear mortgage is the simplest mortgage loan type. You pay monthly mortgage interest and a fixed amount rate in repayment. The interest to be paid is fully deductible for income tax. Because the debt continues to decrease, the interest amount decreases further over the term. This means that your gross monthly payment decreases every month, but the tax benefit also decreases further and further. In total, however, you pay less mortgage interest than with the annuity mortgage.
Annuity mortgage, what is it?
The monthly payment of an annuity mortgage consists partly of repayment and partly of interest. At the beginning of the term you pay a lot of interest and little repayment. Over time, this ratio changes so that you mainly pay repayments at the end of the term. The interest to be paid is fully deductible for income tax, same as a linear mortgage. At the start of the annuity based mortgage loan the instalments are lower than a linear mortgage however in total you pay slightly more interest.
Interest only mortgage, what is it?
With an interest only mortgage you do not repay anything, you only pay interest. The mortgage interest paid on an interest only mortgage is nowadays not a deductible item for income tax anymore. When you sell your home, you basically pay off your mortgage. During the fixed-interest period chosen by you, your monthly payment remains the same. Moreover, this monthly payment is often lower than with the other mortgage loan types. This is because you do not pay any repayment.
An important lenders condition of the interest only mortgage is that a maximum of 50% of the market value of your home may be financed with this mortgage type.
Have you properly insured your future as a homeowner?
Buying a house, home is always an exciting time. Whether it's your first home, property or if you're moving, there are many things to take care of. Like a mortgage. However, that's not all. Are you properly insured? What scenarios are there and what are their possible effects on your financial situation? For example, when purchasing your house, did you also think about your financial situation in the event of disability? And are things properly arranged in the event of death? Personce will give you a financial insight and possible solutions of insurance in these specific situations.
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