With a N.H.G. backed mortgage you are sure that your mortgage loan fits your income. Your mortgage loan meets the standards of the N.I.B.U.D. (National Institute for Budget Information). You know that next to the monthly costs of living you have enough assets to pay for savings, insurance premiums and groceries.
N.H.G. is a safety net in case you divorce, if you become disabled or unemployed or if you or your partner dies. N.H.G. checks if - and under what conditions - you can stay in your home, and if this is not possible, a residual debt can sometimes be cancelled. You are responsible for finding a solution but N.H.G. helps and facilitates.
The maximum cost level in 2018 for a N.H.G. based mortgage loan is 265.000 EUR or - if energy savings measures are involved - the maximum cost level is 280.900 EUR. For 2019 these amounts are 290.000 EUR and 307.400 EUR.
You close a N.H.G. mortgage loan via your advisor or directly at the bank. The costs of N.H.G. are (one off premium) 1% of the amount of the loan, often deductible from your income, and the premium is often earned back shortly because the interest rate of a N.H.G. mortgage loan often is lower than that of a regular comparable mortgage loan without N.H.G.
If you want to renovate and you want to finance the renovation this is also possible under N.H.G. conditions. We call this "quality improvement" (kwaliteitsverbetering).
Examples of quality improvement measures are mentioned below;
▪ Energy saving measures such as HR-boiler cavity wall insulation, floor insulation, double HR++ glazing, a solar boiler or solar cells
▪ A new bathroom, kitchen of dormer
▪ (Overdue) maintenance
If your existing loan already is a N.H.G. mortgage loan;
You can apply for an additional loan (for the renovation), then you have to pay premium only for the additional loan part. You can also apply for a totally new N.H.G. mortgage loan but then you will have to pay the one off fee of 1% over the total loan. (existing + additional part!)
If your existing mortgage loan is a none N.H.G. mortgage loan;
> additional loan. This option is to be considered strongly if the current mortgage loan conditions (interest rate!) are favourable and you want to keep it this way. You pay a premium over the total of your current mortgage loan and the additional loan.
> A complete new mortgage loan. In this situation you will also pay the premium over the total loan (existing and additional loan).
The quality improvement measures have to be specified per item and a valuation report will have to be made (with values before and after renovation!)
The bank or lender will always require a specification of the renovation activities and materials and you will have to send invoices, after being approved by the bank or lender the bank will payout these invoice from your depot to the service provider.
Do you want to know more about N.H.G.? Or do you have related questions in the mortgage area? Feel free to contact one of us financial advisors Peter Schwippert from Expats Financial Solutions.
Tel: 06310 60 525