Applying for a mortgage in the Netherlands

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An important part of buying a house is applying for a mortgage. A mortgage enables you to finance the purchase of a home. It's a long-term loan, so being well-informed about the steps involved is crucial. In this article, we'll explain the steps involved in applying for a mortgage in the Netherlands and delve into other important aspects of the process.

How does a mortgage application work?

There are several steps involved in applying for a mortgage. These are the steps:

  1. Preparation
    Before starting a mortgage application, it's essential to have a clear understanding of your financial situation. It's wise to document your income, debts, and expenses.
  2. Explore mortgage options
    There are different types of mortgages, such as annuity, linear, or interest-only. Research these options to determine which suits your situation best. Evaluate the pros and cons of each type.
  3. Engage a mortgage advisor
    A mortgage advisor can help you choose the mortgage type that best suits your circumstances. It's advisable to consult a mortgage advisor who can assess your financial situation, recommend options, answer questions, and calculate the maximum mortgage amount.
  4. Gather documents
    You will need these documents for your mortgage application:

    - Identification (passport or ID card)
    - Proof of income (pay stubs, tax returns, etc.)
    - Bank statements for the last few months
    - Proof of any existing debts

  5. Submit the mortgage application
    With the assistance of a mortgage advisor, you can submit your mortgage application to a lender. The lender will assess your financial situation and determine your eligibility for a mortgage. A mortgage application typically takes around six weeks. You'll also need a property appraisal report for the application.
  6. Mortgage offer
    Once your mortgage application is approved, you'll receive a mortgage offer detailing the terms and conditions. This document includes the interest rate, loan duration, and any associated costs.
  7. Review mortgage terms
    Carefully review the terms and conditions of the mortgage offer and consult your mortgage advisor if you have any questions. Ensure you understand your obligations, as you're committing to a loan that may last for up to 30 years.
  8. Accept and sign the mortgage offer
    After agreeing to the terms and conditions, you can accept the mortgage offer by signing it. Sending the signed offer back to the lender confirms your acceptance and willingness to proceed with the loan.
  9. Notary for transfer
    The notary will handle the legal process of property transfer, including drafting the mortgage deed and transferring ownership. The lender ensures that the funds are available for the property transfer.

What determines how much mortgage you can get?

Several factors influence the maximum mortgage amount you can obtain. These are the factors:

  • Income
    Your income is the primary factor in calculating your maximum mortgage amount. Lenders need assurance that you can handle mortgage payments, and higher income allows for a larger loan.

  • Financial obligation
    Other financial obligations, such as existing loans, debts, alimony, and credit card payments, affect your maximum mortgage amount. The more financial obligations you have, the less you can borrow.

  • Interest rate
    The mortgage interest rate plays a significant role in your maximum mortgage. A higher interest rate results in higher monthly payments and, consequently, a lower loan amount.

  • Property appraisal value
    In the Netherlands, your loan cannot exceed the appraised value of the property. For example, if a property's appraisal value is €300,000, you generally can't borrow more than that amount. There may be exceptions, such as when making energy-efficient improvements to the property.

  • Age
    Your age can impact your maximum mortgage amount, as it can affect the mortgage term. Older individuals might have shorter mortgage terms, which can reduce the amount they can borrow.

How long does the mortgage application take?

The duration of a mortgage application depends on the lender, the complexity of your situation, and the completeness of the documents you provide. On average, a mortgage application takes about six weeks. However, if you're a self-employed individual, it may take longer, as self-employed individuals often require more documentation. Therefore, it's essential to start the mortgage application process well in advance.

Is a mortgage advisor necessary?

It's highly advisable to engage a mortgage advisor. A mortgage advisor can streamline the process, provide financial guidance, and save you time and effort. While hiring a mortgage advisor incurs costs, it's well worth it to ensure a smooth and efficient process.

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