If you’re going to buy a home and need a mortgage to do so, it’s good to keep in mind that your debts help determine how much you can borrow and therefore whether or not you can afford your dream home. What is actually considered as a debt? We all understand a student debt or a loan, but there are also ‘debts’ that you probably haven’t even thought of. Therefore, we list below the most common debts that lenders look at when granting a mortgage.
Student debt
Student debt is the most common debt among people seeking a mortgage. The average student debt in the Netherlands is around 15,000 euros. How much your debt affects your mortgage depends on when you started your studies. The student loan is registered with the DUO (Dienst Uitvoering Onderwijs), but this is not a formal registration like with the BKR (Bureau Krediet Registratie). When applying for your mortgage, make sure you always communicate that you and student debt, so that your mortgage advisor can make a correct maximum mortgage calculation for you and you won’t have any (payment) problems afterwards.
Lease car
Slightly less obvious as debt is your leased car! “But this too is registered for 100% of the total lease amount with the BKR. The bank assumes 2% as a monthly charge on the total lease amount, which means you can’t spend on the mortgage and therefore borrow less.
Overdraft at the bank
If it is possible to be in the red with your bank, this too is registered with the BKR. The bank looks at the maximum amount you are allowed to be overdrawn, not whether you are actually overdrawn or have been in the past. Some banks offer the possibility of overdraft as a standard feature, and therefore it is also standardly included as a debt. So, check if you really need this option and perhaps consider having it removed. After all, it allows you to borrow less, which would be a shame if you don’t take advantage of this anyway.
Credit card debt
Your credit card can also affect the amount of your mortgage. This is the case when you have a credit card that allows you to pay off in multiple installments. That’s called a revolving credit. It works the same with a credit card as it does with an overdraft. The limit of your credit card is considered in the calculation of your maximum mortgage, not the debt you have on it at that moment. Your credit card is also registered with the
BKR, where banks do a check with every mortgage application.
Revolving and non-revolving credit
A revolving credit is a loan with no end date where you agree on a limit. Every month, you pay interest and principal, just like with a mortgage. You can decide each month whether or not to withdraw money, and if so, how much. Do you have a revolving credit at the time you take out a mortgage? Then, just like with the credit card and overdraft, the bank takes your credit limit as the measure for calculating the maximum mortgage. A non-revolving credit, or a personal loan, is similar to a revolving credit, but it’s a loan where you have agreed on an end date. When you take out a mortgage, again, they take the starting amount of the complete installment loan as the starting point.
Alimony
Alimony does not really sound like a debt, but since you also pay this monthly, just like your mortgage, it is considered a debt. The alimony amount is subtracted from the total monthly expenses so that it is clear what total can be spent on mortgage per month.
Smartphone with a subscription
Most people don’t see this one coming either. Since 2014, your mobile phone subscription has also been included in the calculation of the maximum amount you can borrow. This concerns subscriptions where you pay for the device in monthly installments. The subscription costs for calling and internet do not count. In the calculation of your borrowing capacity, a loan is considered for the entire term of your thirty-year mortgage. So think carefully about whether this will be convenient when you go to get your next subscription.
There are still more debts.
The list we have indicated here can be supplemented with other debts that, like your cell phone, you probably never thought about. Do you have other fixed expenses? Keep in mind that they can affect what you are allowed to borrow. It’s a good idea to map out all your expenses together with your mortgage advisor. Then, based on this information, they can make a good estimate of the maximum amount you can borrow. This way, you can be sure that you are buying a house for which you can actually secure a mortgage. Tip:
Calculate how much you can borrow for a mortgage.
Nobel Mortgages
To make sure you don’t have any surprises, you need a mortgage advisor who will get to the bottom of all debts and hidden charges for you!
Nobel Mortgages is this advisor! Because we at Nobel Mortgages like to help you by giving you high-quality financial advice and think with you on all fronts. We always go the extra mile for our (potential) clients, truly analyze all possibilities and, when necessary, always think outside the box. In this way, we ensure that we can achieve what others cannot. In other words, we are fully dedicated to helping you obtain the best mortgage or loan that suits you perfectly and, of course, aligns completely with your situation and preferences. Do you also want an advisor who looks outside the box and really analyzes all the possibilities for you? Then contact our experienced and enthusiastic team soon. We are available to you 24 hours a day with the utmost commitment and sincere attention. An e-mail is a snap to
info@nobelhypotheken.nl or call or app to
06-54770122.
