Security and peace of mind for your mortgage
The National Mortgage Guarantee (NHG) is a safety net that provides more security for homebuyers when taking out a mortgage. NHG is a scheme from the Stichting Waarborgfonds Eigen Woningen (WEW) and is supported by the government. The goal of this guarantee is to protect both homebuyers and lenders from financial risks. If you have NHG on your mortgage, you can be assured that you will not be fully responsible for your mortgage payments if financial difficulties arise. This can help you purchase your home with peace of mind.
At European Insurance, we help you understand what NHG entails, whether you qualify for this scheme, and how applying for NHG can affect your mortgage terms.
NHG is a safety net for both homebuyers and lenders. It ensures that in the event of a forced sale of the home or if you experience financial difficulties, the lender cannot fully claim the remaining debt from you. This provides extra protection for both the homebuyer and the bank providing the mortgage. In the case of a forced sale, the bank bears the loss, rather than the homebuyer.
Key benefits of NHG include:
Not everyone is automatically eligible for NHG. There are several conditions you must meet to be able to use this scheme:
Property value: The value of the property must not exceed the NHG limit. This limit is set annually by the government and applies to the purchase price of the property, including additional costs like transfer taxes and notary fees.
Mortgage amount: The mortgage you apply for, including interest, must not exceed the NHG maximum. This amount is set annually by the Stichting Waarborgfonds Eigen Woningen and is typically aligned with the property value limit.
Purpose of the loan: NHG can only be granted for purchasing or renovating a home that meets the applicable standards.
Household income: The NHG scheme is intended for people with average incomes. You must demonstrate that you can afford the monthly mortgage payments, even in the event of unexpected situations such as unemployment or illness.
Country of residence: You must be a resident of the Netherlands to qualify for NHG. NHG does not apply to properties located abroad.
NHG not only provides financial protection when taking out a mortgage, but it also influences the terms of the mortgage you can get. Here are some ways NHG can assist you:
Lower interest rates: Since the lender faces less risk when NHG is applied, the interest rate on your mortgage may be lower. This results in lower monthly payments, making it easier for you to pay off the mortgage.
Better chance of approval: Applying for NHG increases the likelihood that your mortgage application will be approved by the lender. This is because NHG gives the lender assurance that they can cover their risk.
Solving payment difficulties: If you encounter financial difficulties temporarily, NHG offers options to suspend or defer payments. This prevents you from falling into arrears and may prevent the forced sale of your property.
Protection in case of forced sale: If the sale of your home does not yield enough to pay off the mortgage in full, NHG ensures that you will not be left with remaining debt. This provides additional protection against unexpected financial setbacks.
To qualify for NHG, you must pay a one-off premium. This premium is calculated as a percentage of the mortgage amount. The exact amount of this premium depends on the loan amount and is added to your mortgage payments. The premium is a one-time charge, payable after the mortgage is finalized.
For most mortgages with NHG, the premium is set at 0.7% of the borrowed amount. This can be added to your mortgage, so you do not have to pay it all upfront.
With NHG, you are not only protected in the short term, but you can also benefit from long-term advantages such as lower interest rates and extra protection against financial risks. This can help you maintain stable monthly payments in the long run and avoid risks that could otherwise lead to financial difficulties.
At European Insurance, we are happy to advise you on the benefits and conditions of NHG and assist you in applying for the National Mortgage Guarantee for your mortgage. We ensure that you receive all the information needed to make an informed decision.
Applying for NHG is done through your mortgage lender. At European Insurance, we guide you through the entire process, from applying for a mortgage with NHG to receiving approval. Our advisors make sure your application meets NHG requirements and assist you in choosing the right lender for your situation.
Conclusion
The National Mortgage Guarantee provides significant benefits for homebuyers, such as lower interest rates and financial protection in case of issues. It helps reduce the risks associated with purchasing a home and offers additional security during uncertain times. If you want to learn more about NHG and how it works, our expert advisors at European Insurance are here to assist you at every step of the process
Do you have questions about NHG or want to know if you qualify for this scheme? Feel free to contact us. Our expert mortgage advisors are here to provide you with personalized advice and support throughout your mortgage application process.
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