For years, starters on the housing market had no chance, but now the tide turns. The housing market is cooling down, house prices are falling and there is room to negotiate again. This is all involved when you buy a house for the first time.
Graduated and a nice job. Time for your own place, for yourself or with your partner. But buying a house is not easy with the strict mortgage rules, still high prices and a starter’s salary. Four questions and answers about buying your first home.
1. Which costs are additional to the house price?
The house price is one, but when buying a house you also have to deal with additional costs, the ‘buyer’s costs’. These are the costs you incur to become the owner of the home, such as notary fees and transfer tax. This last tax depends on your age.
If you are between 18 and 35 years old, you do not pay transfer tax if you buy a house where you will live yourself and it does not cost more than 440,000 euros. You may use this exemption only once. If you are older than 35, you pay 2 percent if you move into the house yourself.
Notary fees differ per notary. On average, you pay about 600 euros for the deed of transfer.
2. How much mortgage can you get as a starter?
How much mortgage you can get depends on several factors such as age, whether you have a permanent contract with your employer, your fixed monthly costs such as debts, and the value of the home. The mortgage lender looks at your gross annual income. You can usually borrow a maximum of 4.5 times this income. Do you earn 30,000 euros gross per year? Then you could get a maximum mortgage of 4.5 x 30,000, or 135,000 euros.
If you have a student debt or, for example, a lease car, this will affect the maximum amount that you can borrow.
You can borrow up to 100 percent of the value of the home to buy a home. You therefore always need your own money to be able to pay the additional ‘costs for the buyer’.
If you are going to renovate, you can co-finance those costs. This is only allowed for the amount by which your home increases in value. When applying for a mortgage, you must submit a valuation report and a specification of the renovation costs. For a valuation report you pay between 550 and 1000 euros. If the mortgage lender agrees, it will deposit the extra loan amount into a building fund account.
For sustainability measures such as solar panels or a heat pump, you can borrow a maximum of 6 percent extra of the home value. The condition is that you have enough income to be able to borrow the total amount.
3. Do you have any advantages as a starter?
If the purchase price of your house does not exceed 405,000 euros, you can opt for a mortgage with National Mortgage Guarantee (NHG). This not only gives you more security if you are no longer able to pay the costs, but usually also an interest benefit. This can be as high as about 0.5 percent. To take out the mortgage with NHG, you do pay a ‘guarantee commission’ of 0.6 percent. With a mortgage of 200,000 euros, that amounts to 1200 euros. Because of the interest discount, you usually pay these costs after one to three years, but it does mean that you must have more of your own money.
4. Insufficient power, and then?
In many municipalities you can qualify for a starter loan. This makes it possible to borrow an extra amount on top of your maximum mortgage. The maximum amount that can be borrowed is on average around 30,000 euros. You then temporarily do not pay interest and repayment on that amount. After three years, it will be assessed whether you can now pay a larger part of the mortgage yourself.
The conditions for this starter loan differ per municipality. For example, some municipalities apply an age or income limit. The closing costs of the starter loan amount to 750 euros, regardless of the amount of the loan. Furthermore, the starter loan is only available in combination with NHG. For more information, go to it Stimulation Fund Public Housing.
The so-called jubelton, with which parents could donate a ton to their children for the purchase of a house, has been significantly reduced to 28,947 euros by 2023. There are conditions attached to this. For example, the recipient, or his partner, must be between 18 and 40 years old. You must also be able to prove in writing that the money has really been used for the new home. In addition, you may not have previously received a large donation or one-off exemption. For more information about donating, visit the website of the tax authorities.
This article is based on information from the National Mortgage Guarantee (NHG), Stimuleringsfonds Volkshuisvesting (SVn) and the Tax and Customs Administration.
Read also: Buy a house now, or wait a little longer?
Watch all our videos about living here:
Free unlimited access to Showbytes? Which can!
Log in or create an account and don’t miss a thing of the stars.