How to Get a Dutch Mortgage As A Freelancer or Entrepreneur: The Guide

Moving to the Netherlands was pretty exciting, but after renting for a while, you may wish to make your time here more permanent. Buying a home in any country can feel intimidating, and the Netherlands is no exception. All this is multiplied when you’re a freelancer or entrepreneur. If you left the world of employment to make it on your own, you may be thinking that mortgages were not meant for your sort, but you couldn’t be more wrong. In this article, we’ll tell you how you can get a Dutch mortgage as a freelancer or entrepreneur in the Netherlands.

The Three-Year Rule Myth

There is a myth floating around that at least three years of bank statements are needed in the Netherlands just to get near a Dutch mortgage application. This is not the case. While bank statements going back three years would undeniably help, it’s not a prerequisite. In reality, it’s possible to buy a house after being self-employed for just 12 months. If you have 12 months of positive results behind you, the bank will ask your accountant to prepare a forecast, and if it’s around the same as the last 12 months, some banks can offer you a mortgage. Similarly, if you’ve been registered as a business for 2 years, but year 1 wasn’t a full year, banks focus solely on the first full 12-month financial year and a positive forecast.

Sometimes you can do it in six. For instance, if you went from being employed to being a freelancer doing the same type of work for similar clients, you can apply for a mortgage after only six months. Lenders are well aware of the skills of those in sectors such as medicine, tech, and engineering, and that these people more often than not make the transition seamlessly. It’s possible for them to look at your last salary, employment and your income as a freelancer.

Working Out Your True Mortgage Income

For those with a regular “boss,” this is pretty straightforward. Banks ask for their gross salary (standard employee).

But for entrepreneurs and the self-employed, this runs a bit differently. You can run your own business as a:

• Freelancer
• Sole trader
• VOF
• BV director.

As stated, if your financials show positive, sustainable net income, banks might consider you for a mortgage. You can also ask your accountant for a projection for the coming financial year. Your bank can use your one-year history and future projection.

Income is worked out in one of two ways:

By the lender

The entrepreneur mortgage advisor sends files directly to the banks’ processing departments. The advantage of their borrowing approval this way is that the mortgage advisors can make a case for why your income should be sufficient to qualify for the loan, and advise personally of any profit dips, for example, highlighting that you were sick, leading to a drop in income. Banks now have dedicated mortgage departments to help entrepreneurs make the process run more smoothly.

External Certification

You can hire an authorized agency to calculate income eligibility for a small fee. They work rigorously on the audit and produce a certificate that banks will accept without queries for 6 months. However, they stick strictly to numbers and rely not on any contextual explanations. Five main agencies provide Dutch banks with income statements: ViiZ, Pentrax, Overviewz, Raadhuys, and Zakelijk Inkomen.

Some advisers, such as Huiskamer Hypotheken, provide a ‘mini assessment’ of your circumstances to decide which route offers you the best chance of success.

How Lenders Calculate Your Income Based On Business Structure

Below are the various business structures.

• Sole Proprietor (Eenmanszaak): For freelancers and sole traders, they calculate the sum by which your earnings exceed business deductions before taxation.
• General Partnership (VOF): The bank looks at the net result and divides it by the total amount contributed by everyone who goes into business with you. So, in a partnership with a friend, if your partnership has earned €100,000, they use €50,000 as income.
• Private Limited Company (BV): As a Managing Director, you should pay yourself the minimum salary (currently €58,000) by law, but they will look at this along with the “market salary” for your role, and the highest‑paid employee in the company, and use the highest. Inexperienced mortgage advisors might provide incorrect advice, saying that the minimum wage you pay yourself is the amount banks consider, but for an entrepreneur mortgage, they check surplus corporate profits to increase your borrowing capacity.

Going Hybrid: Employment and Freelancing

Some people mix a ‘regular’ job with a side business. This could be to avoid financial risk, and if they have a good salary, they may not wish to leave. The good news is that banks can look at both incomes, and even include foreign income sometimes.

They will look at the hours you work. So if you work 36 hours a week as an employee and 12 hours in your own business, that is fine. However, if you make this combination possible with 60-70 hours a week, then a lender may view that workload as unsustainable in the long term. They need to see balance.

Read Also: The Best Freelance Jobs for Expats in the Netherlands

The Importance of Tip Top Paperwork

Sure, you might have a lucrative self-employed business, but if your finances are not in order, the chances are the bank will politely decline your application.

How these are presented to a lender makes a huge difference in whether or not you get approved. When the papers are in order and the bank has no questions, the whole process will go smoothly. Paperwork is really important. In some cases, they even call your accountant or administrative office to ask additional questions. So there must be a need to choose someone really good at their work.

If you’re a procrastinator who usually asks belastingdiest for an extension, it could cause issues for the mortgage application. That is because banks usually demand your previous year’s tax form, which, if filed on time, you would have back by June 1st. Banks need to see your Belastingdienst tax return before they will seriously review your application. So it’s worth submitting your tax return on time and paying the tax owed on time, as it will really help with your mortgage application.

The Age Factor

By the time you are nearing age 57, bankers tend to adopt a different strategy. The statutory retirement age in the Netherlands is 67. When you are 57 and looking to apply for a 30-year standard mortgage from the front line of development, the banker knows that a substantial part of your repayment time will be in retirement.

In contrast to employees at companies in the Netherlands, who automatically contribute to their retirement plans, freelancers build their own safety net. Banks will need to see your financial retirement plan to check that there’s enough money to both live and pay the mortgage.

Dutch-American Friendship Treaty Visa

The DAFT visa is a special residence permit designed for U.S. citizens to live and work in the Netherlands as entrepreneurs or freelancers. If you arrived on a USDAFP visa, you are allowed to buy a house. So long as you have a residence permit.

Consider Extra Fees

Transfer-of-ownership taxes should also be counted. In general, a 2% transfer ownership tax is required when purchasing residential property. However, if the buyer is under 35 years of age, it is the first property bought, and the buyer intends to make it the main residence, then the buyer is fully tax-exempt up to €555,000.

Notary Appointment

Lastly, never underestimate the importance of the Notary appointment. Dutch law requires the signatory to fully comprehend the massive legal documents accompanying the transfer of the property deed. If you are not as comfortable with the high Dutch required, the notary will stop the process until an independent, authenticated translator is brought in. It will add a small fee to your closing costs, but in return, you will be sure you actually know what you are signing.

Saying that freelancers have no way into the Dutch housing market is really totally untrue. With strong credit (credit history in an EU country will be checked, but not in the US) and an independent mortgage advisor, the process of buying that Dutch house can be much easier.

You Don’t Have To Do It Alone

Working for yourself doesn’t mean it needs to take years to get a Dutch mortgage. In fact, quite the opposite. The “secret” is knowing your actual income, preparing documents properly, and working with those in the know who understand the Dutch mortgage market. Huiskamer Hypotheken is on hand to help and guide you in the process, whatever your situation, and wherever you are in the country. With the right guidance, you can avoid costly mistakes, skip the stress, and finally get the keys to a place.