How to do more with your home by changing your mortgage
Expat Mortgages is a team of independent mortgage brokers who help people with buying property in the Netherlands. The company has more than 15 years of history working exclusively with internationals. The team helps first time buyers, but also people who already have a property and would like to make changes in their existing mortgage.
House prices are at record levels, but if you need an extra study room, a new kitchen or better insulation for a cold winter, you should not despair. Borrowing rates are also at record lows, and homeowners may even be eligible to release more cash from their investment, get a cheaper deal, or use their mortgage to make sustainability improvements.
Do more with your house (and your investment)
Joyce Wassenaar-Pepping, head of the aftersales department at Expat Mortgages, says that her team has helped hundreds of people do more with their house (and their investment).
“It is quite challenging to buy another property at the moment, so many people are thinking about renovating their own house,” she says. “Most people are working from home, and looking at their property the whole day and, because of higher property values, a lot more is possible.”
Improve your home by using your house
Wassenaar-Pepping points out that if your house has risen in value, you may well be able to borrow more money against it, if your income can also support this. Your loan may be worth less as a proportion of the total value in turn, and this could also mean that you qualify for a better rate with your mortgage adviser and can save money here, or potentially borrow more.
A lot of people are investigating releasing money for renovation, typically 30.000 euros to 60.000 euros; sometimes even up to 100.000 euros. When a property owner intends to make improvements to the home’s sustainability - such as better insulation or windows, more money (up to 106 percent of the value) can be loaned against the asset, including for properties backed by the National Mortgage Guarantee. There are also various subsidies you can investigate to help meet the costs.
In certain circumstances, a loan increase against your house can also be taken out for another investment purpose, such as a second home or a second car, and benefits from mortgage rates that are typically lower than personal loans. Some homeowners also want to borrow the money to pay off the leasehold, something which should improve a property’s value and make it more sellable in the future. Others might be interested in renting out their first property and buying a new home.
Taking out a loan against your home
The first step in the process is to contact a mortgage broker, who will make an initial assessment to see if you meet the Loan to Income (LTI) criteria. “The next step is to get an appraiser to value your house, we can also help with this,” says Wassenaar-Pepping. “For an appraisal, you typically pay 700 or 800 euros, which can be a tax-deductible expense.”
“Typically, the whole process takes around three to five weeks”
If you want to renovate, you will need quotes from contractors estimating the cost of the work (and the appraiser can also look at the potential value of the house when the works have been carried out). Then, a mortgage adviser, such as Expat Mortgages, can help you broker a new deal with your current mortgage provider or work out whether it is worth breaking any potential penalty clause and remortgaging on another deal or with another provider. “Typically, the whole process takes around three to five weeks,” adds Wassenaar-Pepping.
Are you getting the most out of your mortgage?
For people just wanting to check they are on the best deal at the moment, it’s worth doing a regular check. People with mortgages taken a few years ago might be paying 2 or 3 percent interest, when there are much better rates available now.
With certain mortgage providers, you can also request a “rentemiddeling” which finds an average interest rate between your rate and its current offer, sometimes for a very small administrative fee. “Sometimes, including the penalty and the additional costs, you wouldn’t earn back what you paid to cancel a fixed rate and start another deal, so this may not always be beneficial,” says Wassenaar-Pepping. “We consult with our clients and work out what is best for them.”
On the other hand, looking ahead, nobody knows where interest rates would be in several years, so it might still be worth your while to take a risk and fix for the next decade, paying a penalty now. Another thing to bear in mind: with very few houses on the market for sale, and local councils pumping in money to solve housing shortages, it is a booming time for building. So if you’re planning a big build, get quotes in the diary and book contractors well in advance…while you are sorting out the financing.
Expat mortgages: expert advice for expats in the Netherlands
Expat Mortgages has national coverage with brokers all over the country. Amsterdam Utrecht, Groningen, Maastricht, Rotterdam or The Hague – they have it all covered. You can contact Expat Mortgages by filling in the contact form or you can also drop an email directly to the aftersales team: [email protected]. They also a live chat with advisors to answer important questions right away.
Expat Mortgages runs regular webinars for homeowners on issues such as refinancing, and the next is on 17th February - sign up here.