You might think that you face a double hurdle: you do not hold a European passport and on top of that you have a temporary contract of employment. So what are the chances of obtaining a mortgage and buying your own house? It always gives me great pleasure to tell those of our Expat clients who fall into this category: Yes you can! Even if they do not hold an indefinite residence permit.
Most banks have been defrauded in the recent past by untraceable Expats who abscond, leaving behind them large unpaid mortgages. For this reason many banks are cautious about lending to non-Dutch nationals. However, information and data exchange between (especially European) countries has greatly improved, and moreover the modern Expat is generally highly educated. It has therefore been possible to restore the banks’ faith in Expats, and with it their readiness to provide mortgage loans to them. Provided , of course, that their mortgage application is handled professionally. Our company is specialized in this area, and whilst not every bank is equipped to deal with international clientele, we have managed to secure special deals with several banks for the international community in the Netherlands . So European or not, indefinite contract or fixed-term, 30% ruling or tax free salaries, it is normally possible to find suitable finance for most prospective home buyers, each with their own set of circumstances.
How do you know if you qualify?
How much you can borrow depends on your income and also of the value of the property. For this reason the bank will always need a valuation report drawn up by an independent property valuator. An impartial mortgage advisor can tell you how much you will be able to borrow on your income. For this reason it is advisable to bring a recent salary slip to a meeting with such financial advisors. If you are self-employed, the bank will normally request sight of three years of annual figures and recent income tax returns.
Do you qualify for tax relief on the mortgage interest payments?
Yes, but only if you pay taxes in The Netherlands. So even if you have 30% ruling, you can still benefit from tax relief on your mortgage payments. And it is possible to receive this relief on a monthly basis, thereby reducing your monthly mortgage payments. If you do not pay Dutch taxes because your salary is paid outside The Netherlands or because you enjoy a tax free salary, you cannot claim this tax relief. However, if your partner pays taxes in The Netherlands, he or she can normally claim the full tax rebate, even if you own the property together (and in some circumstances, even if the property is in your name only).
Can you also qualify for a mortgage if you do not have an indefinite contract of employment?
In most cases, yes. Your employer will need to fill out a Statement of Employment indicating that you will be granted an indefinite contract after the current one expires. In cases where the employer is unable to make such a declaration, it will certainly help if you can show three years of previous income. Furthermore, the banks we work with make special allowances for several international organizations for whom temporary employment contracts are standard issue,
What is the procedure to follow if you want to buy a house or an apartment in The Netherlands?
After consulting your financial advisor, you will know what your budget is. The next step is to find your dream house, generally with the help of your own real estate agent. (Since the seller’s real estate agent’s job is to represent the interests of the seller, you may wish to consider hiring your own!). Once agreement has been reached on the purchase price, a Purchase Agreement will be drawn up. In the Amsterdam region this is done at the Civil Law Notary’s office, but elsewhere in The Netherlands this is normally done by the Real Estate Agents. After signing the Purchase Agreement, you have three days to change your mind. This is the so called cooling-off period. It is also standard to have a financial contingency clause in the contract. This means that you have a couple of weeks to secure a mortgage offer from a bank. If you are unsuccessful, this means that you can still get out of the Purchase Agreement by letting the seller (or his Agent) and the notary know in writing before this financial due date. You will need two letters from two different banks denying you the mortgage loan. Your financial advisor will also be able to help you here. In normal circumstances, though, the mortgage applicant is rewarded with a mortgage offer and the next step is then to make a deposit of 10% of the house price. This 10% needs to be transferred to the Notary’s office or (and most commonly) the mortgage bank sends a letter of guarantee to the Notary’s office for this 10%.
The final date in the Purchase Agreement is the actual date of transfer of ownership of the property. On this date you become the owner and all rights and duties related to the property will transfer to you. You will go to the Notary’s office to sign both the deed of transfer of ownership as well as the mortgage deed on this day. An interpreter is normally present if you do not have a good command of the Dutch language. The dates in a Purchase Agreement should not be set too lightly or too tightly. The advice of a real-estate agent and that of your financial advisor can save you hassle and keep you safe from legal pitfalls.