7 June 2021Stress about getting a mortgage in holland?

We can imagine that it is exciting and even unnerving to close a mortgage abroad. We’re talking seriously large amounts of money. Maybe even the biggest debt you’ll ever have. And signing documents in Dutch that you might not fully understand, isn’t the best feeling in the world.

Things can get a bit unclear when you don’t exactly know how the Dutch mortgage system works. And that is where we come in.

We founded Klår in 2018 because we believe that buying a house, as well as arranging the financing, should actually be fun. It’s exciting enough as it is, and nobody likes the hassle, the stress and the paperwork that comes with it. We know!

‘Gain clarity, get focus’ is what we always say. So, we’re here to help you get a clear overview of mortgages in The Netherlands. So you can focus on what’s important. We’d love to take a few moments to put your mind at ease and give you more insight in the clever Dutch system. And explain what kind of mortgages there are, how they work and which parties are involved.

First of all, the Dutch government is here to protect you as a customer. Also, all the organizations that supply mortgages and give advice on getting a mortgage are supervised by the government. In other words: The Netherlands are a very well organized and safe place to invest your money in a house.

The process of getting a mortgage for you is similar to what the Dutch have to go through. But although there are over 45 mortgage providers, not all are willing to work with expats. That’s why it is good to know your way around in the marketplace.

There are two different kinds of mortgages you can apply for:

1. Residential mortgage: if you are looking to buy a house to live in.
2. Buy to let mortgage: if you want to buy property as an investment.

According to the Dutch law, buying a house to live in makes you a ‘consumer.’ And in The Netherlands, consumers are protected against money lenders. They have a set of rules they have to operate by and they are closely monitored by the government.

Important guidelines:

• Loan to income: The maximum amount is based on your gross yearly income. The general rule is that you can spend 20% to 25% of it on a house.
• Loan to value: the mortgage should not be higher than the worth of the property.

About ten of the 45 mortgage providers offer a ‘buy to let’ mortgage. Not all of them work with expats, but… some do. So it is definitely possible to invest money in a place to rent out.

Important to know: renting out a house makes you a ‘professional investor’. You are now considered to know the risks of investing and you no longer have the same government protection as consumers. The mortgage providers also have their own conditions. These conditions are based on their own risk profile.

Conditions you have to take into consideration if you want to buy a house to let:

• You should live in The Netherlands to file an application.
• Maximum loan to value amounts to 70% – 80%.
• An interest-only mortgage and mortgage with repayment are possible.
• Interest and repayment must be covered by the net rental income.

There’s a number of players active in the Dutch mortgage market. Here’s a short overview on the different roles and responsibilities.

Government
The government has drawn up laws and regulations that financial institutions must comply with. For example, every financial institution must be able to demonstrate that they have a complete picture of your (financial) situation. They must base appropriate mortgage advice on this. And to check this, they must do research. Such as anti-money laundry activities.

These laws and regulations are in turn checked by an independent body. This body is the AFM (Autoriteit Financiële Markten = Netherlands Authority for the Financial Markets).

Real estate agents
You can ask the help of real estate agents for buying or selling houses. They are “matchmakers” in the housing market. They guide you through the deal, with an associated price analysis of the market. They also do the price negotiations between you and the selling party.

Institutional mortgage providers
There are various types of lenders on the Dutch market. The most well known providers are the banks. Traditionally, they have been the largest mortgage lenders. But insurers and pension companies have been gaining ground in recent years.

Due to the strict laws and regulations, lenders are focused on standardizing mortgage products and application processes. Which leads to a focus on “operational excellence” and less on “customer intimacy”. This increases the gap between you and the lender. And this gap gets bigger every day. Because more and more providers are making it very difficult for consumers to apply for a mortgage directly.

Intermediaries – Klår Finance
This is exactly where an intermediary company like Klår comes in. We believe it is our mission to fully focus on your specific situation. We stand next to you and we can really zoom in on your worries and wishes. We will make a match between you and our network of like minded experts, and we will help you buy that home. Or help you invest money in a place to let.

We’re here to help. Please give me a call if you’d like to explore your opportunities.