3 TIPS TO ARRANGE SERIOUS MONEY SERIOUSLY
The prices for properties in the Netherlands are rising significantly. Therefore the odds of you needing a mortgage of more than € 1,000,000 (one million) are increasing as well. With these amounts of money there are more points of attention and risks are bigger compared to a lower mortgage. Thus all the more reason to be well prepared when you start your search and that’s why we think you should read our three most important tips below.
1. BEAT THE TIMEPRESSURE
We will start off with the most important tip. Do you want to buy a new home these days? Then you will have to make some very important (financial) decisions in a short time-span. Think of overbidding for instance or bidding without a financial clause and very short deadlines.
Our advice: make sure that you are well prepared and know your financial budget. This way you will be able to keep your head clear.
2. KNOW WHO YOUR MORTGAGE PROVIDE WILL BE
Important for you to know is that the Netherlands counts more than 45 different mortgage providers, although not every provider works with expats. Besides that not every provider offers the possibility of a mortgage above one million.
In theory the acceptation process for a higher mortgage is the same as for a lower one. The provider tests the application (according to the law) based on the loan to income & loan to value ratios.
However they will perform additional “control checks”. The application will have to pass more approvers or even credit committees. This isn’t necessarily a problem but it will take some more time. You should know this in advance and it may be good to take into account while discussing the terms with the sellers.
Our advice: know which provider(s) you want to apply with. This way you can make your decisions more quickly.
3. KNOW THE RULES
A mortgage above € 1,000,000 means a higher risk for the provider, compared to for instance two mortgages of € 500,000. Good for you to know is that mortgage providers in general are risk-averse. That’s why they often have additional demands and conditions.
For instance: they aren’t willing to finance the full market value of the property but a maximum of 90%. These may seem small details however they can have a large impact.
Example: financing 90% loan to value, instead of the maximum mortgage of 100%
| Purchase price property k.k. | € 1,200,000 |
| Total investment (incl. 5% additional expenses) | € 1,260,000 |
| Valued market value of the property | € 1,200,000 |
| Maximum loan to value (90%) | € 1,080,000 |
| Input own resources | € 180,000 |
In this example the decrease to a loan to value of 90% means an increased input of your own resources of € 120,000.
Our advice: make sure that you are up to speed with the most important rules. This way there won’t be any surprises.
CONCLUSION
Use this knowledge to your advantage! We hope you will find the right property soon. Do you want to have more security or clarity? Or don’t you feel comfortable with the ‘million dollar question’ yet? We are ready to help.
We love to think along.
Do you have any questions?
