The financial Funda-mentals of finding a home in the Netherlands

For anyone living in the Netherlands, the word Funda has become rather commonplace. Which makes sense; it's an amazing tool to help in your search for your new home. Even better, Funda can also provide insights into how your future home can impact your financial capacity. 

Here are the must-knows that will help you become a financial Funda guru. 

Thinking like a mortgage provider

You know what you want from a new house, but have you ever thought about what a mortgage provider might want from your new house? After all, they are also heavily invested in the property. Considering these five things can help you assess the possible financing you can secure for a property.

1. The condition and your plans 

There are some important physical features of the home that financers look at (and not just because they are curious to see what you are purchasing!). Is it ready to live in? Or does it need some extra nurturing and attention? In other words, what is the plan and what is required to achieve this? 

For example, even if the home is a bit of a fixer-upper, the banks will usually require some essentials, such as a kitchen and a bathroom. While banks are often willing and able to facilitate renovations, keep in mind that they usually won't finance the full costs.

2. The energy label 

The energy label of your desired property has a very strong impact on your borrowing capacity. Sustainability is playing an increasingly important role in every aspect of life, including the housing market.

To encourage people to invest in sustainability, most lenders are allowed to increase your mortgage capacity and offer a favourable interest rate if your property has a good energy rating.

3. Amsterdam homes

For Amsterdam homes specifically, there are three scenarios you may face regarding land ownership:

• The home is on its own ground. This is great news, and no further consideration is needed. 
• The home is on leased land that has been paid off until a distant date in the future. This is also good news, but you do need to make sure that you check the specific conditions.
• The home is on leased land, and you are required to pay a monthly or annual sum to use the land. This is less good news, and having ground lease repayments will definitely harm your maximum borrowing capacity.

Talk to Klår Finance about your borrowing capacity and mortgage options

4. Marktwaarde (market value)

Don't underestimate the importance of your property's market value. On Funda, you will see the asking price, which does not necessarily reflect the property's actual value. This needs to be assessed by an independent valuator.

This is important because the valuator's opinion heavily affects your borrowing capacity. Your best friend in helping you understand the value of the home before the independent valuation is your real estate agent. Real estate agents' expertise is in knowing what a reasonable bid is (which can be higher than the asking price) and what a reasonable market value is.

5. VvE (Vereniging van Eigenaren) checklist

This one is only applicable for apartments. When purchasing an apartment, you automatically join the VvE (or homeowners' association), which handles the maintenance of the building. It is important, not only for you but also for the lender, to check that the VvE runs professionally.

They need to be registered with the KvK, hold at least one yearly meeting, maintain a reserve fund, provide building insurance, and have a maintenance plan. This is all visible on Funda, under the VvE list. 

There will also be an amount that you have to contribute to the VvE every month. This monthly repayment does not affect your borrowing capacity (unlike the ground lease). 

The financial Funda-mentals

While you dream about the perfect kitchen and envision your ideal bathroom, it's essential to consider the perspective of the mortgage provider. Only then can you have any idea about whether you will secure the amount of funding required for your purchase.