List of costs explained
Buying a house is an exciting milestone, but it’s important to be aware of the costs involved to make informed decisions. In the Netherlands, there are various expenses and considerations to keep in mind when purchasing a property. By familiarizing yourself with these costs, you’ll be better prepared to embark on your home buying journey. Our team at EasyMortgage is here to support you every step of the way.
Buyers are typically required to provide a 10% deposit after the cancellation period of a purchase agreement expires. To avoid the need for an immediate cash deposit, many buyers use a bank guarantee. A bank guarantee is a written commitment from a bank to pay the 10% deposit to the seller if the buyer fails to fulfill their obligations. It provides financial security for the seller and allows buyers without immediate access to the deposit to proceed with the purchase. If the buyer defaults, the seller can claim the deposit from the bank through the guarantee. The buyer then becomes responsible for repaying the bank.
In the Netherlands, there is a 2% transfer tax, or “overdrachtsbelasting,” applied to residential property purchases. However, there is an exemption available for certain buyers. One such exemption is for first-time buyers who are under 35 years old and purchasing a property with a value of 440,000 euros or less. In these cases, the buyer is exempt from paying the transfer tax. This exemption aims to support and facilitate homeownership for young individuals entering the housing market. It is advisable to consult with a mortgage broker to understand the specific requirements and conditions for the transfer tax exemption.
Buying agent (optional)
A buying agent is a professional who provides valuable assistance throughout the home buying process. They offer services such as accompanied property viewings, conducting valuations and neighborhood analyses, developing bidding strategies, negotiating on behalf of the buyer, and carefully reviewing the purchase agreement. While hiring a buying agent is not mandatory, their expertise and guidance can greatly benefit buyers in making informed decisions and ensuring a successful purchase. At EasyMortgage, we also offer buying agent services to assist clients in their home buying journey.
Technical inspection (optional)
The technical inspection is a crucial step in the house buying process. It typically occurs during the three-day cooling-off period after signing the purchase agreement. This inspection assesses the visible aspects of the property to identify any potential issues that may affect its value or require repairs. While it is usually not mandatory for securing a mortgage, it is highly recommended. However, it’s important to note that the inspection is non-invasive and focuses on visible areas, so it may not uncover hidden defects or guarantee the absence of asbestos or foundation problems. Buyers may need additional specialized inspections for specific concerns. The purpose of the technical inspection is to provide buyers with valuable information about the condition of the property, helping them make informed decisions about their purchase.
National Mortgage Guarantee
The Nationale Hypotheek Garantie (NHG) is a mortgage guarantee scheme in the Netherlands that offers added protection for lenders and borrowers. It provides financial security by guaranteeing mortgage loans for residential properties with a maximum purchase price or appraised value of 405,000 euros or lower. This means that either the market value or the purchase price of the property should not exceed 405,000 euros for eligibility.
By obtaining an NHG-backed mortgage, borrowers can benefit from lower interest rates and more favorable loan terms. To secure the NHG coverage, borrowers are required to pay a one-time premium, which is set at 0.6% of the mortgage amount.
The NHG serves as a safety net in case of financial difficulties, as it covers the lender’s losses in the event of forced sale if the proceeds do not cover the outstanding mortgage debt. This guarantee helps reduce the risk for lenders, making it easier for borrowers to access affordable financing and pursue homeownership.
The NHG aims to promote responsible homeownership and provide stability in the housing market. By offering this guarantee, it encourages lenders to offer mortgages with lower interest rates, ultimately making homeownership more accessible and secure.
A valuation report is a necessary part of the house buying process to secure a mortgage. It determines the property’s market value and helps establish the maximum loan amount a lender can provide. Typically, a lender can finance up to 100% of the appraised value. However, in cases involving energy renovations aimed at improving sustainability, the loan limit can be extended to a maximum of 106% of the appraised value. This exception encourages environmentally friendly practices and allows borrowers to finance both the property purchase and energy renovations.
Mortgage advice / broker fee
The mortgage broker is responsible for assisting buyers in obtaining a mortgage. Unlike some other countries, where the lender pays the broker, in the Netherlands, it is the buyer who pays the mortgage broker directly. This payment structure ensures the independence of the broker, as they are not influenced or obligated to any specific lender.
At EasyMortgage, we take pride in providing transparency and clarity. While some brokers may break down their costs into multiple components like mortgage advice fees, handling fees and administration costs, we believe in simplicity. We charge a flat, all-inclusive rate for our services, ensuring that there are no hidden fees or surprises along the way. This approach allows our clients to have a clear understanding of the costs involved and promotes a straightforward and trustworthy relationship. We prioritize the best interests of our clients and aim to deliver a seamless mortgage experience.
When purchasing a house, the involvement of a notary is a mandatory requirement. The notary plays a crucial role in the transaction by preparing two essential documents: the deed of transfer and the mortgage deed.
The deed of transfer, also known as the “akte van levering,” is the legal document that transfers the ownership of the property from the seller to the buyer. The notary ensures that the deed is properly drafted, accurately reflecting the terms and conditions agreed upon between the parties involved. During the signing process, the notary verifies the identities of the parties and witnesses their signatures to make the transfer legally binding.
The mortgage deed, or “hypotheekakte,” is a document that establishes a mortgage on the property in favor of the lender. The notary prepares this document, which outlines the terms and conditions of the mortgage agreement, including the loan amount, interest rate, repayment terms, and any other relevant provisions. The mortgage deed is signed by the buyer and notarized to secure the mortgage on the property.
The notary ensures that both the deed of transfer and the mortgage deed comply with legal requirements and provide adequate protection for all parties involved. They oversee the entire process, including conducting necessary checks and registrations, to ensure a smooth and legally sound transfer of ownership and establishment of the mortgage.
In the Netherlands, if a buyer does not speak Dutch, the notary is required to arrange for a live interpreter during the signing of legal deeds. The notary reads out the deeds in Dutch, while the live interpreter provides simultaneous translation into English or another language that corresponds to the buyer’s mother tongue. This ensures that the buyer fully understands the content and implications of the legal documents being signed.