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Mortgage issues when leaving NL?

s9910934e
September 7, 2010 6:25:30 PM CEST

Pondering keeping our Amsterdam apartment when we leave in November. It would be nice to come back one day and show the kids where they were born. They may even want to live in the apartment where they first drew breath!

As per other threads on here, it is difficult to keep a mortgage or refinance if the lender knows you might not ever be coming back. Supposed to request permission to rent... yaddayaddayadda

Anyone have experience with leaving the country in this type of situation? Any problem with the lender if they find out? How would they find out?

N.B. We will be deregistering and will stop claiming the mortgage subsidy, so noone is being cheated. We will continue to pay our mortgage and our "housesitter" would be a personal friend and will be allowed to register, so as far as we see it, noone is losing out.

I don't have any moral qualms with not telling the bank as, apart from the fact it's a bank , the apartment's value is significantly higher than the mortgage value so they wouldn't lose out if they decide to foreclose.

Would love to hear your observations or experiences.

Thanks in advance.
sps
- 258 posts
September 8, 2010 3:16:06 PM CEST

I once discussed this scenario with my lenders. The wise thing to do is talk it thru with your bank, they are always appreciative of knowing these situations upfront. And since your mortgage is not endangered (property value is more), it is probably a case of rearrangement of payment process etc. I also heard that if you rent it out, lender will have first claim on the rent income, but as long as you pay off your installments, there should be no issue.
If someone with more knowledge/experience can shade light on bank's legal rights to hold you back, chase you in someway if you leave?
osita
- 2284 posts
September 8, 2010 3:45:04 PM CEST

s9910934e (Sep 7 2010, 03:25 PM) said: > original post
Anyone have experience with leaving the country in this type of situation? Any problem with the lender if they find out? How would they find out?

The lender will start legal proceedings as soon as it's confirmed you don't live there anymore. They do this by sending a makelaar around to your property on their behalf (it's probably in the small print of your contract that they have the right to ensure you're keeping the mortgaged property in good repair). If they don't know your present address, the repossession will proceed through court, any tenant be evicted, and subsequent bank sale/auction happen without your knowledge.

Their suspicions can be raised in different ways, such as you don't answer your mail or they call you and your phone line is dead. If you no longer claim mortgage relief, it's possible the Belastingdienst will inform them? I don't know how they find out, but they do and from there, it's simple to check if you're still registered at the address, and when they find you're not . . .
ouloveit1
- 4310 posts
September 8, 2010 6:08:33 PM CEST

I agree.

If you are no longer registered nor accepting tax relief (because why would anyone do such a thing!) at an address on which you hold a mortgage ... umm it's just a matter of time.

You will lose your property.

It's better just to come clean with the bank and ASK about your options ... which may be few.
avocado
- 632 posts
September 9, 2010 1:37:26 PM CEST

s9910934e (Sep 7 2010, 03:25 PM) said: > original post
Anyone have experience with leaving the country in this type of situation? Any problem with the lender if they find out? How would they find out?

N.B. We will be deregistering and will stop claiming the mortgage subsidy, so noone is being cheated. We will continue to pay our mortgage and our "housesitter" would be a personal friend and will be allowed to register, so as far as we see it, noone is losing out.

I don't have any moral qualms with not telling the bank as, apart from the fact it's a bank , the apartment's value is significantly higher than the mortgage value so they wouldn't lose out if they decide to foreclose.

Definitely tell the lender. The reason they want to know if you are renting out the apartment and not living there yourself is: they do have a problem if they have to foreclose on you. Specifically, because Dutch tenant law is so strong ('koop breekt geen huur'), if they are left holding your apartment, they are also left holding your tenant, and they can't just kick him/her out. And any new buyer would also have to continue renting to that tenant, which means the auction value of the apartment would be lower. And no, any assurances on paper or otherwise that your tenant promises to leave in case of foreclosure won't cut it.

All the lender wants is assurances that you will be able to continue making the mortgage payment, so for instance proof of your income in your home country.
s9910934e
September 13, 2010 6:24:20 PM CEST

Spoke with the bank. Despite the fact we will be earning almost double what we earn here and not even accounting for the fact we would also be receiving rent here, the answer is basically no.

I fully accept that it is part of the mortgage agreement we signed up to. That I don't have a problem with.

But the funny thing is the bank are willing to give up a "guaranteed" revenue stream. (You'll just have to take my word for it being guaranteed.)

When I suggested to them that in the absence of a concrete offer to buy the apartment, they are basically leaving us to choose between renting out the apartment against their mortgage rules or leaving the apartment vacant in a city short of housing, I was offered only silence. You can't force somebody to buy your apartment. You can drop the price so low that the mortgage could not be paid out from the proceeds though, in which case we would just as well jump on a plane and say bye-bye NL and leave them to sort out the mess. (OK, I wouldn't really do that, but some people do.)

So the risk of being foreclosed upon is not really any worse than the other alternatives we face.

A lesson for other expats in renting being better than buying perhaps? To paraphrase an old chestnut, "only in the Netherlands..."
veldrin055
September 13, 2010 7:16:06 PM CEST

I'll give you €20 for the house
s9910934e
September 13, 2010 9:42:07 PM CEST

veldrin055 (Sep 13 2010, 04:16 PM) said: > original post
I'll give you €20 for the house

Only if you pay the notary fees and there is a brown paper bag full of Aussie dollars under the table!
ouloveit1
- 4310 posts
September 14, 2010 12:31:10 AM CEST

Yes, this is a bummer.

LOTS of expats don't realize that they cannot legally rent out their property .... unless otherwise arranged with a clause in the mortgage agreement.

I am SURE the banks have been soooo burnt by people renting out houses .. and the legal problems from that rental .. they will absolutely stonewall you.

It's something you have to keep in mind if/when you ever decide to move away.

You need to delay your plans to move so that you can sell the property and if you cannot sell it ... you are SOL. Of course, now that they are on to your moving plans .. they will be watching you like a hawk.
veldrin055
September 14, 2010 1:40:13 PM CEST

s9910934e (Sep 13 2010, 07:42 PM) said: > original post
Only if you pay the notary fees and there is a brown paper bag full of Aussie dollars under the table!

Well...I have $35 from my last trip on on my dresser. Should buy you a few Carlton Draughts.
mvn
- 3960 posts
September 14, 2010 3:00:55 PM CEST

s9910934e (Sep 7 2010, 04:25 PM) said: > original post
Pondering keeping our Amsterdam apartment when we leave in November. It would be nice to come back one day and show the kids where they were born. They may even want to live in the apartment where they first drew breath!

As per other threads on here, it is difficult to keep a mortgage or refinance if the lender knows you might not ever be coming back. Supposed to request permission to rent... yaddayaddayadda

Anyone have experience with leaving the country in this type of situation? Any problem with the lender if they find out? How would they find out?

N.B. We will be deregistering and will stop claiming the mortgage subsidy, so noone is being cheated. We will continue to pay our mortgage and our "housesitter" would be a personal friend and will be allowed to register, so as far as we see it, noone is losing out.

I don't have any moral qualms with not telling the bank as, apart from the fact it's a bank , the apartment's value is significantly higher than the mortgage value so they wouldn't lose out if they decide to foreclose.

Would love to hear your observations or experiences.

Thanks in advance.

Considering the bank's answer, I would not deregister and have your friend register. and pay the mortgage. To me that mean's you are not abandoning the property
s9910934e
September 14, 2010 5:56:10 PM CEST

Yes, the system does lend itself to abuse. It's a shame that being honest is not the best policy as I also suspect there are many cases where people move abroad, don't deregister, continue claiming the interest rebate, etc.

Our own makelaar, who himself only receives a fee if we sell the apartment, also mentioned that in his opinion 80% of people who rent don't ask permission from the banks and that in our case we probably would have been better off keeping it to ourselves....

As for not deregistering, that could bring down a whole lot of other consequences upon us I would imagine... but again, if we never plan on coming back what difference does it make? If we're already likely to have the apartment repossessed, it can't get much worse I suppose.

Sadly, postponing our departure is not an option.

Thanks all for your comments.
ouloveit1
- 4310 posts
September 14, 2010 8:31:31 PM CEST

Yes but you are focussing on the wrong stuff again .. meaning not deregistering and keeping the rebate. That's not the issue.

The authorities don't care about that stuff.

What they are saying is if you rent the property ... and something goes wrong - THEY get stuck trying to get that renter out and WORSE ...a property that they have to sell quick or they have to put up for auction so they are gonna be out of pocket for a ton of expenses .. plus ... all that legwork.

That's why they don't want you rent out the property so .. that should be your focus.

Besides the people your makelaar knows that rent illegally are probably Dutch (with local family etc) so they know the system and they know how to get away with it but again if they get caught (and they do) .. it's over.

When I moved here 10 years ago - I got a mortgage after living here 6 months - with no downpayment. But today it is completely different for expats. It's harddd to get a mortgage if you are an expat - because they git tured of people taking a runner and going back to their home country.

So in the end .. if you are gonna let them take the property .. it will just be another nail in the coffin for future expats trying to buy.

Wat jammer...
rigsby
- 266 posts
September 15, 2010 12:27:02 PM CEST

If you are still registered here then you'll be liable to income tax on your world wide income because by remaining registered suggest that you are still resident here. And that's not what you want so you need to de-register. Have you tried re-financing with another lender or even the same bank? You need to replace your existing mortgage with a commercial loan. But the loan probably needs to be significantly less than the value of the property for the bank to be interested and the interest rate will probably be higher. You will be liable to tax in the Netherlands on the rental income (box 3). And depending which country you go to you may also have to declare the rental income there. You need to do it properly or not at all otherwise you'll be committing tax fraud.
ouloveit1
- 4310 posts
September 15, 2010 7:54:43 PM CEST

Now, that's a thought ....
Deleted Member
- 5427 posts
September 16, 2010 1:37:19 PM CEST

ouloveit1 (Sep 14 2010, 05:31 PM) said: > original post
When I moved here 10 years ago - I got a mortgage after living here 6 months - with no downpayment. But today it is completely different for expats. It's harddd to get a mortgage if you are an expat - because they git tured of people taking a runner and going back to their home country. -_-

Hmmm....dunno,they seem to falling over themselves to sell mortgages at the moment.
ouloveit1
- 4310 posts
September 16, 2010 8:41:50 PM CEST

Really? Without a Permanent Residence Permit?

There have been a lot of posts here from expats that do not qualify for a mortgage - mainly not enough income or they have not been here long enough (5 years) to gain Permanant Residency.

The people that do manage get a mortgage without Permanent residency are not getting the 4.50 interest rates - they are paying the high interest rates and they are havinig to place a down payment on the property.

This is because of all the expat 'runners' ... so they are rightfully concerned.
mickgibney
September 16, 2010 11:51:43 PM CEST

rigsby (Sep 15 2010, 09:27 AM) said: > original post
If you are still registered here then you'll be liable to income tax on your world wide income because by remaining registered suggest that you are still resident here. And that's not what you want so you need to de-register. Have you tried re-financing with another lender or even the same bank? You need to replace your existing mortgage with a commercial loan. But the loan probably needs to be significantly less than the value of the property for the bank to be interested and the interest rate will probably be higher. You will be liable to tax in the Netherlands on the rental income (box 3). And depending which country you go to you may also have to declare the rental income there. You need to do it properly or not at all otherwise you'll be committing tax fraud.

Hi ,if you can show that you can fiance 35% of the hypo you can do what ever you like with the property and when you leave holland the rent is tax free,,,,but you pay a fixed tax of 1.2% on the value of the property every year ,,,ex if you bought the house for 100,000 5 years ago and it is now valued at 135,000 you are in the clear ,,the bank is your servant not your master
mvn
- 3960 posts
September 17, 2010 12:21:36 AM CEST

rigsby (Sep 15 2010, 10:27 AM) said: > original post
If you are still registered here then you'll be liable to income tax on your world wide income because by remaining registered suggest that you are still resident here. And that's not what you want so you need to de-register. Have you tried re-financing with another lender or even the same bank? You need to replace your existing mortgage with a commercial loan. But the loan probably needs to be significantly less than the value of the property for the bank to be interested and the interest rate will probably be higher. You will be liable to tax in the Netherlands on the rental income (box 3). And depending which country you go to you may also have to declare the rental income there. You need to do it properly or not at all otherwise you'll be committing tax fraud.

these are all separate agencies who make use of the registration
even if you are registered if you can prove to the tax office you are not living here then they can't tax you. full stop.
cloggieking
September 17, 2010 4:46:59 AM CEST

If you remain registered in NL you will probably need to keep paying your Dutch medical insurance on a brighter note... you will keep add the magical 2% to your AOW.

In time you'll be caught though, NL is one of the most wired countries and more and more databases are being connected every day.

If you are thinking of Rotterdam or Den Haag it is a no-go from the get-go due to the random no warrant searches they do.
Deleted Member
- 5427 posts
September 17, 2010 11:37:48 AM CEST

ouloveit1 (Sep 16 2010, 05:41 PM) said: > original post
Really? Without a Permanent Residence Permit?

There have been a lot of posts here from expats that do not qualify for a mortgage - mainly not enough income or they have not been here long enough (5 years) to gain Permanant Residency.

The people that do manage get a mortgage without Permanent residency are not getting the 4.50 interest rates - they are paying the high interest rates and they are havinig to place a down payment on the property.

This is because of all the expat 'runners' ... so they are rightfully concerned.

I have a 5 year verblijfsvergunning....which has nearly run out.I could get a dutch passport within a week if I wanted,which I don't.
4,5% is already high btw.
I've got a deal for 3,4% 5 year fixed but I'll hang on a bit cos its going to drop a bit more yet in the next month or so by the look of things.
ouloveit1
- 4310 posts
September 21, 2010 2:39:28 PM CEST

mrfook (Sep 17 2010, 08:37 AM) said: > original post
I have a 5 year verblijfsvergunning....which has nearly run out.I could get a dutch passport within a week if I wanted,which I don't.
4,5% is already high btw.
I've got a deal for 3,4% 5 year fixed but I'll hang on a bit cos its going to drop a bit more yet in the next month or so by the look of things.

But that's not what I am talking about.

Like I said, when I moved here 10 years ago I got a mortgage within my first 6 months because a Perm residence permit was not required to get a mortgage back then.

But now it is different – as so many expats have dumped their homes and left the country that new expats have trouble getting a mortgage WITHOUT a Permanent Residence permit (which takes 5 years). The banks want to see that you have something solid here.

So how are the banks falling all over themselves for expats?

 So I said it is hard for expats to get a mortgage... and you said
 'Hmmm....dunno,they seem to falling over themselves to sell mortgages at the mome
 Then I said 'What? without a Permanent Residence permit?
 And then you come back to say that ... you DO have a Permanent Residence permit.

Ahhh soooo hee hee … what's the point? If you have a permanent permit - no problem but you can't get a mortgage if you have only been here a couple of months ... that's the issue.
dandm
- 4 posts
September 21, 2010 2:47:00 PM CEST

We took out our mortgage two years ago, had no problems at all getting a mortgage despite only having just arrived and being on a KM visa.

The rate is great too, we are paying 1.3% + the monthly Euribor rate, which at the moment means we are only paying 2% and have been for most of the mortgage. We were offered the standard fixed rate as an alternative at the time, but went with the variable as we expected the Euribor to be depressed for some time. We also ensured that we got the "you can rent it out" clause in our mortgage contract.

We know plenty of other expats with a similar experience. Perhaps a good mortgage broker is the key?
ouloveit1
- 4310 posts
September 21, 2010 3:00:20 PM CEST

dandm (Sep 21 2010, 11:47 AM) said: > original post
We took out our mortgage two years ago, had no problems at all getting a mortgage despite only having just arrived and being on a KM visa.

The rate is great too, we are paying 1.3% + the monthly Euribor rate, which at the moment means we are only paying 2% and have been for most of the mortgage. We were offered the standard fixed rate as an alternative at the time, but went with the variable as we expected the Euribor to be depressed for some time. We also ensured that we got the "you can rent it out" clause in our mortgage contract.

We know plenty of other expats with a similar experience. Perhaps a good mortgage broker is the key?

I am very surprised to hear that - mainly because of the zillions of posts on expatica complaining about how they could not gain a mortgage because they were not here long enough.

Don't take my word for it .. just search through the older posts.
dandm
- 4 posts
September 21, 2010 4:18:55 PM CEST

ouloveit1 (Sep 21 2010, 12:00 PM) said: > original post
I am very surprised to hear that - mainly because of the zillions of posts on expatica complaining about how they could not gain a mortgage because they were not here long enough.

Don't take my word for it .. just search through the older posts.

Well yes, all I can share is our experience and it was very straight forward as it has been for other people associated with the company that brought us across. As I said, perhaps the key was being put onto a good broker?

I'm really not sure, but I have not heard of people being knocked back.