An experimental program called the National Mortgage Guarantee, ‘Nationale Hypotheek Garantie’ in Dutch (NMG), has been introduced on Bonaire. This NMG makes it possible for young families and first-time buyers to buy or build a home without the need for such a large amount of personal savings. This is a big change for the island of Bonaire and means many more families will be able to realize the dream of home ownership!
Overcoming barriers to home ownership!
Local banks currently finance only up to 70-80% of the value of a home. The buyer needs to finance the remainder. In addition to the buyer’s cost, which are approximately 7% of the purchase sum, are the bank mortgage closing fees. This means that buyers need to have a considerable amount of money available up front for the purchase of a home.
Saving money on Bonaire is challenging at best. With a very tight rental market and high demand, rental prices are high making it very difficult to rent and save concurrently. Mortgages on Bonaire are also time constrained. Mortgages are granted only up to the age of 65 of the oldest purchaser (in the case of joint filing). The longer it takes a hopeful homeowner to save up to for the deposit, buyer’s costs and the bank closing fees, the more they will have to pay each month with a shorter-term mortgage.
The NMG was introduced on Bonaire by the Dutch government in order to lower these two specific barriers to homeownership. This is already stimulating the real estate market and the economy as well. This NMG allows approved buyers to finance the entire value of their home. Approved buyers will still need to have a down payment available to cover the buyer’s costs and bank fees. Mortgages will also be set for 30 year. Age will not be used as a limiting factor. Based on the results of this initial 5-year trial, the program may be permanently implemented on Bonaire and eventually expanded to Saba and Statia.
Special rules for qualifying for a NMG mortgage include, but are not limited to the following:
- Buyers need to be permanently employed and be residents of Bonaire,
- The mortgage can only be for the use of purchasing or building a first home,
- The property must be fully insured including hurricane damage,
- The maximum purchase total must not exceed $ 225,000.-.
- NMG loans are currently only available on Bonaire.
NMG mortgages come with certain costs. A premium of 1%, calculated over themortgage amount, is due annually. This is the same premium as used in the Netherlands. This premium is expected to drop to 0.9% in 2019.
Former residents of The Netherlands may also qualify.
If you have lived in the Netherlands, but now reside on Bonaire, please be aware that the BKR (Stichting Bureau Krediet Registratie) will be checked for present records.
As the only bank under the full supervision of the Dutch Banking Association, Maduro & Curiel’s Bank (MCB) is currently the only bank qualified to extend these mortgages at this time. More banks may qualify in the future.
We’re here to help!
Does this sound right for you? Don’t wait! There are only 70 NMG’s available each year in this first 5-year trial period.
Contact Caribbean Homes and we will gladly show you a selection of homes that may qualify for an NMG type mortgage.
We are happy to be on your side; professionally all the way. Contact us with any question you may have via [email protected] or (+599) 717 4686 or (+31) 85 8880442.