Graduated and just started working? This is often the moment when the desire for a home starts to itch. No more bothering of landlords who have broken CVs late to repair, or finally their own place without the strict rules of parents. But obtaining a mortgage can be a problem as a starter. In the past, parents could guarantee the mortgage. Unfortunately, since 2013 it is no longer possible to take out a mortgage with this help, but there are alternatives.
What is a mortgage?
Since the mortgage rules have been tightened considerably, it is more difficult for starters to buy a house. Often the incomes of starters are low at the start, which is sometimes too low to take out a mortgage yourself. Until 2013, a solution for this was, for example, that your parents guarantee the mortgage. Your parents were then liable if you could no longer pay the mortgage costs.
When a mortgage has been taken out for 2013 whereby the parents guarantee the mortgage, mortgage lenders have only provided the mortgage guarantee when there was a relationship between the mortgage taker and the guarantor, such as a parent-child relationship. At that time you might not be able to bear the entire mortgage burden. The mortgage lender expects you to start earning more as a starter in the future, so you can ultimately pay the mortgage burden yourself. Naturally, the mortgage lender checked whether your parents have enough assets and whether it is expected that you will earn more in the future. Do your parents pay a part of the mortgage? The tax authorities see that as a gift. If the total amount is above the annual exemption, your parents will pay tax on this. The exemption depends on your age.
Guarantor stand for mortgage and National Mortgage Guarantee
National Mortgage Guarantee (NHG) is a guarantee that if you can not, by no means of your debt, no longer be able to bear your mortgage payments and therefore have to sell the property, the debt will be waived. Think of a divorce, becoming unemployed or incapacitated for work, as a result of which the costs have become unaffordable. If your parents guarantee the mortgage then it is not possible to take out the mortgage under the conditions of NHG.
Guarantee mortgage and mortgage deed
If your parents guarantee the mortgage, they must also sign the mortgage deed. Your parents are seen as the main liability for the mortgage. Can you no longer pay the mortgage payments? Then your parents are being asked to pay the mortgage.
Guarantor to raise mortgage
Have you made steps in your career and therefore a higher income? Can you easily pay the mortgage costs yourself? Then the guarantee for the mortgage can be canceled. In order to cancel the mortgage guarantee, you must submit a request to the mortgage provider.
Garant stand mortgage or deposit stand
Being a guarantor for the mortgage is different than guaranteeing a mortgage, yet these terms are often confused. In the case of deposit, the bail carrier only has to pay if there are written reminders or notice of default. With a guarantee for the mortgage, the guarantor must already comply with this at the first request for payment.
Guaranteed standing for the mortgage by parents no longer possible
From 2013, it is possible for almost no mortgage lender to allow your parents to stand surety for the mortgage. However, other alternatives are possible to still get help from your parents when taking out a first mortgage.
Other possibilities than guarantor are mortgage
Your parents can also help you in other ways than guarantee, with:
- a loan
- a gift
- the cash circle
- rental of the house
- joint sale
- use of the surplus value of the home of your parents
They can decide to provide you with a loan. This can be a private loan, which does not have to be registered notarially. However, the conditions and agreements must be clearly recorded and the loan must be registered with the tax authorities. About this loan, just like with a bank, interest must be paid. The interest is deductible from the tax if the loan is repaid, as happens with an annuity or linear mortgage . The interest must be comparable to that of a mortgage, so symbolic interest of 1% is not possible. A loan from parents does not mean that you automatically get a higher maximum mortgage with the bank. The amount is deducted from the mortgage because you have to pay monthly for the loan to your parents.
From 2017 it is possible for parents to donate one-off tax-free money, where it must be demonstrable that this is used for the purchase of a house, repayment of the mortgage or buyout of the lease. In 2019 the maximum is increased to € 102.010, -. Parents may use the general exemption per calendar year to a maximum of € 5,428.
In the case of a cash round, your parents lend you money for the purchase of the house, pay interest on it every year and deduct this mortgage interest. Subsequently, in the same calendar year, you donate an amount equal to or lower than the interest charge and fall within the annual donation exemption. The interest payment and the donation must be separate from each other.
Hiring of the house
Your parents can also decide to buy the property for you and then rent it out to you. Because the house is not the main residence of your parents they can not use the mortgage interest deduction. In addition, they will also have to pay capital return levy. The rental income does not have to be declared at the tax.
An option that still occurs is buying the house together. You and your parents then jointly own the home and own 50%. This is convenient for you, but not for your parents. Just like with the letting of the house, the house falls into box 3 and no use can be made of the mortgage interest deduction. Here, too, the capital yield levy will look. The mortgage interest deduction does apply to you.
Overvalue home parents
If your parents have surplus value on their own home, you can use this as collateral for part of your mortgage. Your parents do run the risk of having to sell their own home if you can no longer pay the mortgage costs of your home. In addition, this tax technology has a lot of feet in the earth before this construction is possible.
Independent mortgage adviser in your area
As you read, there are several ways in which your parents can financially support you in buying a house. Some options are harder to implement than other options. That is why it is useful to get in touch with an independent mortgage advisor in your area who can help you make the best choice. We are happy to put you in touch free of charge.