For a mortgage

When your bid is accepted, it is time to fix everything to finalize the buying process. Then it is time to arrange the mortgage. To take out (refinance) your mortgage, you need a valuation report. For this, you need to have a house valuation carried out for your house. Why do you need a property valuation for a mortgage and how does it work?

What is a property valuation?

Once you have bought the house and the preliminary sales contract has been signed, you will have the house valued. In a home appraisal, an appraiser accurately estimates the house value, based on the house itself and the local housing market. An appraiser substantiates this home valuation value in an appraisal report, which you send to your mortgage lender.

Property valuation for a mortgage

You need this appraisal report to take out or transfer your mortgage. This is because your house serves as collateral for the mortgage loan. As a result, your maximum mortgage is also linked to the property value of the house. And since you are only allowed to borrow 100% of the home value since 2018, the appraisal value directly affects the mortgage amount.

Valuation value vs. purchase price

The bank calculates your maximum mortgage using with the appraised house value as well as the purchase price, whichever is lowest. If your purchase price is lower than the appraised value, there is no problem. Your maximum mortgage is then equal to the purchase price.

Valuation lower than purchase price

But it also happens that the house appraisal value is lower than the purchase price. For instance, because you had to pay the owner to buy your dream house. Then your maximum mortgage is equal to the appraised value. So you cannot borrow the full difference between appraised value and purchase price and have to pay with your own money. If you do not have sufficient savings (or excess value), you will not be able to finance the house.

Property valuation and own money calculation example

How much can you borrow for your mortgage? We will explain this with an example calculation.

Appraised value higher than purchase price:

• You buy a house for €250,000
• The appraised house value is €260,000
• Your maximum mortgage is €250,000

Purchase price higher than appraised value:

• You buy a house for €250,000
• The appraised house value is €240,000
• Your maximum mortgage is €240,000
• You cannot borrow the difference of €10,000

Appraisal and house value

An appraisal house value that is a lot lower than the purchase price, so you don't want that. You would rather not buy a house below your own value. That is why it is important to find out how much the house value is before you start buying a house. Fortunately, there are several ways to calculate the house value.

Cost of house appraisal

So a home valuation is compulsory. You have to pay for it in the Netherlands. That means a valuation 1 costs you between €450 and €650 when you buy a house. These prices can vary per appraiser. Fortunately, the valuation costs are tax deductible from the income tax return. That makes a difference.

Choosing an appraiser

A home valuation is often carried out by an estate agent, but not the selling or buying agent of the house. These are not objective. Your purchase broker (or mortgage broker) advises you on a good valuer. Would you rather choose a valuator yourself? Then you can, for example, via Cadastre, independent appraisers.

NWWI validation Make sure your appraisal home is carried out by an appraiser affiliated with NWWI. A home valuation report with the NWWI seal of approval is accepted by most lenders and is mandatory for taking out an NHG mortgage.