Many home buyers consider linking the National Mortgage Guarantee to the mortgage. This offers additional security if you yourself can no longer pay the mortgage due to, for example, a divorce or disability. But the National Mortgage Guarantee also entails costs and certain obligations. To make the choice for National Mortgage Guarantee easier or not, you will find an overview of the advantages and disadvantages of National Mortgage Guarantee here.
Why National Mortgage Guarantee?
A mortgage with National Mortgage Guarantee offers both you as a homeowner and the bank extra financial security. If you have to sell your house because you can no longer raise a mortgage, the Stichting Waarborgfonds Eigen Woningen (WEW) will come to the rescue if a residual debt arises. The WEW takes over the residual debt from you and can even cancel the residual debt. That way you won’t be left behind with debts. A prerequisite for this is that the problems arose without your fault and that you do everything possible to keep the debt as small as possible.
In addition, National Mortgage Guarantee helps to prevent you from having to sell the property through the housing costs facility. If you temporarily have a lower income and therefore cannot pay the full monthly amount of the mortgage, the bank will calculate how much you can pay each month. You then pay this amount each month and you will only pay the remaining amount back if your income is up to standard again. This way you prevent the property from being put on sale.
National mortgage guarantee benefits disadvantages
This extra security is not only pleasant for you, but also for the bank. He knows for sure that the full mortgage amount will be repaid. That is why banks offer a discount of up to 0.6 percent on mortgage interest. That saves a few hundred euros every year. That provides an additional benefit: you can take out a slightly higher mortgage due to the lower monthly payments.
National Mortgage Guarantee advantage with energy-saving measures
The amount of the mortgage that you can take out with National Mortgage Guarantee depends, among other things, on your income. But on top of the maximum mortgage you can borrow a maximum of 15,900 euros extra for energy-saving facilities, such as insulation and a high-efficiency boiler with an National Mortgage Guarantee mortgage. This is because National Mortgage Guarantee assumes a cost saving thanks to the energy-saving provisions, so that you can still pay back the higher loan.
Disadvantages National Mortgage Guarantee
A disadvantage of National Mortgage Guarantee is that you pay costs for National Mortgage Guarantee when you take out the mortgage, namely 1 percent of the mortgage sum. Suppose that this amounts to 250,000 euros, then you pay a one-off 2,500 euros. You may deduct these costs from your taxable income in box 1, as a result of which you get a part of the costs back. Moreover, you will earn back this amount in about a year through the lower interest rate. Another disadvantage is that your mortgage may not be higher than a certain limit, namely 265,000 euros in 2018.
Finally, you are only entitled to finance the residual debt if you really could not continue to pay the house and you have done everything to prevent a residual debt. So if you have your own money, you must first address this before you receive a reimbursement.