Financing your Amsterdam renovation with a bouwdepot

In today’s real estate market, especially in Amsterdam, expats find that they can’t compete for the picture-perfect house or apartment. Instead, many expats choose to buy a fixer-upper, a property that needs a little bit of TLC before they can call it home. Luckily, there are a few different ways to finance a home renovation.

In today’s real estate market, especially in Amsterdam, expats find that they can’t compete for the picture-perfect house or apartment. Instead, many expats choose to buy a fixer-upper, a property that needs a little bit of TLC before they can call it home. Luckily, there are a few different ways to finance a home renovation.

Start saving, now!

Simply put, start putting away money immediately.

With renovation costs being 1200 per m2 on average, make sure you’re thinking far ahead and starting to put away pennies where you can spare them.

Think about what you definitely need, like checking the foundation of the property and replacing old, single-glazed windows. Think about what you’d like to have, like new floors and/or furniture. And finally think about what you’d love to have if you could afford it, like refitting the bathroom.

Get a bouwdepot (or construction deposit)

One of the most common ways to finance a renovation is to arrange for a construction deposit.

First, it’s important to remember that your mortgage will never be greater than 100% of the property value. Unless you are renovating for energy savings or greener energy, in which case the mortgage can be 106%!

To determine the property value, most financial loan institutions will request a taxation report from a third-party realtor. This is one of the documents required to determine the value of the mortgage. You can ask for a taxation report to specify whether and which renovations would lead to a higher property value. This extra information will give your mortgage provider the information they need to decide whether a larger mortgage for the purpose of renovation is feasible for your situation.

Once your mortgage and construction deposit are approved, you’ll receive the construction deposit in a separate account, which is generally open anywhere between 6 and 24 months. During your renovations, you will get plenty of invoices that need to be paid. You simply provide them to the bank to be paid on your behalf. Or, if you’ve already paid them with your own cash or savings, you can request a return.

Remember that you can close your construction deposit account at any time. In case your renovation is finished before the agreed-upon term or the funds have been used. If your renovation takes longer than planned, you can usually extend the duration of your deposit for a set amount of time in consultation with your mortgage adviser and provider.

Savings + bouwdepot

There’s a reason we mentioned savings at the start of this article. That’s because often, the cost of the home and the cost of the renovation will not be fully covered by the mortgage. This can be due to several factors, such as your financial situation or the state of the property you want to buy and renovate. Keep in mind that you will often need to contribute to the purchase of your property.

Not to worry, Arjen will keep your best interest in mind when helping to determine if the property you’re eyeing will fit within your financial situation. And whether a bouwdepot is the right choice for you. Ready to get stuck into your finances with an expat mortgage expert? Contact Arjen today!