The expectation is that many seniors will need a mortgage in the coming years. Until now that was not always easy. But that will change from 17 June 2018.
Need for a new mortgage
The expectation is that in the coming period many seniors will need financing for the purchase or renovation of a home. The following wishes can be considered:
- to adapt the home in a structural way so that they can continue to live in the home up to an old age;
- sell the old (large) home and purchase a smaller home, with or without certain care provisions;
- to take energy-saving measures that increase living comfort, lower living costs and contribute to environmental protection.
Legal rules were tight
Banks must comply with legal requirements when deciding to grant a mortgage. Certain rules are applied to these legal requirements. These rules indicate when, on average, the granting of a loan is justified or not.
In the case of seniors, income often changes after the end of working life. The financing rules against which banks must assess the application for a mortgage do not appear to work well in this situation. The result is that many applications from seniors for a mortgage loan are more or less automatically rejected.
Rules are adjusted
Minister of Internal Affairs and Kingdom Relations, Ollongrun, has agreed to amendments to these rules. From 17 June 2018, lenders may test applications from consumers who already receive AOW or attain the AOW age in a maximum of 10 years, on the basis of the actual costs that these consumers will have after financing. This means that many more senior citizens are currently eligible for a mortgage.
National Mortgage Guarantee also possible
From 17 June 2018 it is also possible for seniors to take out a mortgage and to take out a National Mortgage Guarantee for this. This guarantee provides additional security if, due to unemployment, disability or death, the monthly mortgage payments can no longer be paid. However, the target group of seniors is then required to opt for a long period in which the mortgage interest rate is fixed. With the current low interest rates, this will not be an objection for most seniors.
Do you want more information about the new options for seniors to take out a mortgage? Let us know. We are happy to give you more detailed information.