The National Mortgage Guarantee (in Dutch; ‘Nationale Hypotheek Garantie’, and after this NMG) has been introduced on Bonaire, and that is welcome news! This NMG makes it possible for young families and first-time buyers to buy or build a home without the need for a large down payment. This is a big change for the island of Bonaire and means many more young families will be able to realize the dream of home ownership!
Why is there a need for a National Mortgage Guarantee on Bonaire?
Local banks currently finance only up to 70-80% of the value of a home, the so-called ‘Loan to Value’. The buyer needs to finance the remainder. In addition to the buyer’s costs are the bank closing fees, which are approximately an additional 7%. 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 to the age of 65 of the oldest purchaser (in the case of joint filing). The longer it takes a hopeful homeowner to save the down-payment, 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 purchase price of their home making the loan to value 100%. 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 years rather than considering age as a limiting factor.
Can I qualify for a National Mortgage Guarantee type of mortgage on Bonaire?
Special rules for qualifying for a NMG mortgage include, but are not limited to the following:
- Buyers need to be permanently employed
- The mortgage can only be for the use of purchasing or building a home
- The property must be fully insured including hurricane damage
- The maximum purchase total must not exceed $ 225,000.-.
NMG mortgages come with certain costs. A premium of 1%, calculated over the mortgage 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.
Have you lived abroad?
Not a problem! You may still qualify. If you have lived in the Netherlands, please be aware that the BKR (Stichting Bureau Krediet Registratie) will be checked for present records.
Do all banks off the National Mortgage Guarantee type mortgage on Bonaire?
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.