Are you going to buy a house? You can then check with your mortgage loan advisor whether you are eligible for the National mortgage loan Guarantee (NHG). What NHG means and what you have to meet to qualify for this, we are happy to explain.
What is National mortgage loan Guarantee?
Imagine that you become unemployed, get divorced or incapacitated and you have an owner-occupied home. Your income can then drop so drastically that you can no longer pay the mortgage loan costs and have to sell the property. If you then sell the property for less than the outstanding mortgage loan amount, you will retain a residual debt. Under certain conditions, the remaining debt can be waived if you have taken out a mortgage loan with a National mortgage loan Guarantee. This only applies if the sale of your home is demonstrably necessary. Of course, it first looks if there are opportunities for you to keep the house.
Possibilities to preserve property
If you are unable to pay the mortgage loan payments temporarily, you can use. This is an additional loan from National mortgage loan Guarantee. Your housing costs will then be temporarily reduced. This arrangement can be made if there is a prospect that you will eventually be able to pay the charges again.
The benefits of National mortgage loan Guarantee
The great advantage of having a mortgage loan with NHG is that your residual debt can be waived if you meet the conditions for this. This offers many people a sense of confidence with the purchase of the home. The interest rates of mortgage loans with a National mortgage loan Guarantee are also often lower than mortgage loans without an NHG.
Disadvantages of National mortgage loan Guarantee
The ‘disadvantage’ is that before you take out a mortgage loan with NHG you have to pay an amount, namely 1% of the mortgage loan amount. In addition, you do not have the guarantee in advance that the residual debt will be waived, that only applies if you meet the conditions.
The conditions to take out a mortgage loan with a National mortgage loan Guarantee
You can only take out a mortgage loan with NHG if you meet certain conditions. For example, the house must be your main residence and you also occupy it as such. A mortgage loan with NHG is possible for various forms of residential homes, such as apartments and caravans. However, it is not possible to purchase recreational homes, garages, houseboats or mobile homes. A maximum amount has been set for the mortgage loan, which can not exceed € 265,000 as of 1 January July 2018. This amount includes the additional costs such as transfer tax, notary fees and security commission. For these additional costs, they charge 6%, so the purchase price may not exceed € 249,100.
Do you have a BKR registration? Depending on the code with your registration, you may or may not get a mortgage loan with NHG. And, as with any mortgage loan, the mortgage loan lender determines whether you are eligible for a mortgage loan based on your income and the housing market value . Does the valuation report show that there is a demolition / enforcement consideration? Then NHG is not possible.
A mortgage loan with NHG can not only be concluded with the purchase of an existing home, also with a new house, renovation or renovation plans.
NHG conditions for refurbishment
Do you want to remodel the home that you have in mind? For both a new building with additional work or a renovation of an existing home, you can co-finance the costs with the NHG mortgage loan. So do you have overdue maintenance, or do you want to expand the kitchen of the new house? Or do you want to install energy-saving facilities? Like isolating solar panels or the house? A mortgage loan advisor can view the options together with you.
There are, however, conditions attached to NHG when renovating. For example, in the valuation report the market value of the house must be included in the renovation and afterwards. Also the costs for the renovation or improvement must be noted in the valuation report, an architectural report or a specification with the list of activities and an overview of the estimated costs. The total amount of the entire mortgage loan, including the renovation costs and additional costs, may also not exceed the NHG cost limit.
Residual debt when moving
If you want to move because there is a family expansion, or you want to move because of a new job, but you expect to sell your current home at a loss. Then you are not eligible for the remission of the residual debt, even though you have a mortgage loan with NHG. However, under certain conditions you can co-finance the residual debt in a new mortgage loan.
The conditions for residual debt financing of NHG:
- You currently have a mortgage loan with NHG and the new home you will finance with a mortgage loan with NHG.
- The new loan matches your income.
- The costs for the new home, including the residual debt, are not higher than the NHG cost limit. Does a part of the new mortgage loan exceed this cost limit? Then this part can be financed without NHG.
- The residual debt arose after 1 January 2014.
- The repayment of the residual debt must be repaid in an annuity. The right to the mortgage loan interest deduction for the residual debt expires after 15 years.
- Only after your current home has been sold can you take out the mortgage loan for the new home. And you have 1 year after the house is sold the time to finance the residual debt in a mortgage loan for the new home.
Conditions for cancellation of the residual debt with National mortgage loan Guarantee
If you have to sell the house with a residual debt, you can get the remaining debt waived under certain conditions. Below we have noted the conditions:
- Your current mortgage loan is a mortgage loan with NHG and the new home you also finance with a mortgage loan with NHG. If the mortgage loan of the new home is higher than the NHG cost limit, you can finance the remainder without an NHG
- The origin of the residual debt took place after 1 January 2014
- The new mortgage loan is linked to your income, according to the loan to income rules
- The remaining debt is repaid in an annuity.
- You can close the new mortgage loan after the current home has been sold. If the house is sold you have 1 year to finance the residual debt in a new mortgage loan for the new home.
- The mortgage loan lender is leading in the assessment whether you can co-finance the residual debt. So let yourself be informed by a mortgage loan advisor.
- The mortgage loan deed states that the mortgage loan has been concluded with NHG.
- Your situation has been changed by 1 or more of the personal situations below and therefore you can no longer pay the charges:
- You are unemployed without it being your fault
- You are going to divorce or separate. View the process in case of a relationship termination with NHG .
- Your partner has died
- You have become incapacitated for work
- For these reasons you must be able to demonstrate that you have too little income to bear the burden.
- You have limited the residual debt as much as possible by paying the mortgage loan on time. If possible, you have used equity to pay off the remaining debt.
- You have kept the property well, so that the value of the house is not reduced by overdue maintenance.
- You have tried with the sales broker to sell the property for as high an amount as possible.
Submitting the application debt cancellation with NHG
Have you met the above conditions? Then your mortgage loan lender can file a loss declaration with the National mortgage loan Guarantee. Then this declaration is assessed to see if you are entitled to remission. You will receive the result from NHG by post. If NHG cancels your remaining debt, they will pay the remaining debt for you to the mortgage loan lender. You can then breathe a sigh of relief.
A negative BKR registration after sale property with loss
If you have sold your property at a loss, this will be reported by the mortgage loan lender to the Credit Registration Bureau (BKR). If NHG cancels the remaining debt, you no longer have any debt. This is reported by the mortgage loan lender at the BKR by recording an end date for your BKR registration. From the end date, the BKR registration will remain visible for another 5 years. However, this does not prevent you from applying for a new mortgage loan with NHG.
Has NHG not waived the remaining debt? Then an end date is only entered in the BKR once you have fully repaid the residual debt. At that moment the registration is visible for 5 years in the BKR. After the registration has been removed you can again qualify for a mortgage loan with NHG.
Do you end your relationship, are you unemployed or incapacitated for work and are you threatening to no longer be able to pay the mortgage loan? Then contact your mortgage loan advisor or mortgage loan lender. If you have a mortgage loan with NHG, you can check whether you can keep the property so that you can avoid selling at a loss. It is important to take action yourself. Try to pay the bills as much as possible, see where you can save. For example, reduce your energy costs , telecom and insurance .