Construction deposit account

A construction deposit account is an important topic during a mortgage interview. How does a construction account work? How can you apply for a building fund account? And can you calculate a building fund account for me? These are all good questions when you want to start working on your (new) home. You need a lot of money for the renovation or construction of a new house. You can borrow this money from a mortgage lender. In this article you can read exactly how this works.

What is a construction deposit account?

A building fund account is part of your mortgage. The money is in a jar. This separate account contains the loan that is intended for the construction of a new house in the case of new construction or the costs of the renovation of your existing home. The lender has borrowed a certain amount. The amount is fixed in the deposit account for a maximum period – usually two years. As soon as you receive costs for the new kitchen, bathroom or from the contractor, you can declare this invoice. In this way, the invoice is paid using the building fund account.

How does a home construction account work?

If you are planning a major renovation or you are considering buying a new home. The bathroom is being renovated or you want new windows and a dormer window. That means more living comfort and an increase in the value of your home. The investment of this is significant. Not everyone has the money for this directly available from their own resources. Moreover, given the historically low mortgage interest rate, borrowing is extremely attractive. You want to co-finance the renovation in your mortgage. The increase mortgage is an option. The money for the renovation is deposited by the mortgage provider in a building fund account. During the renovation you can withdraw the desired amounts from the building fund account by submitting a declaration. A mortgage advisor from Bliss will be happy to help you calculate the maximal mortgage including a construction deposit. A building account with calculate a mortgage is a profession in its own right. Get good advice about this.

What are the conditions?

There are important rules of the game associated with building depot. The conditions may be an important aspect when comparing and finding a suitable mortgage. It is wise to take the conditions into account in advance. What is the amount of the construction deposit, what compensation do you receive in deposit interest and for what period does this apply? Just a few conditions. When you buy a home, an important rule is that the mortgage must not exceed 100% of the market value after renovation that has been officially determined by an appraiser. The valuation report will therefore contain a market value before and a market value after renovation. Is the renovation intended for energy-saving measures such as solar panels? Then there is “verduurzamen”. In this situation you may borrow 106% of the market value of the home. The amount in the building fund account is usually valid for two years. You can use the deposit up to 2 years after a mortgage has been taken out.
If you still have money left over after this period and have used this amount, the total will be paid off in full on the mortgage. It is also possible to cancel the construction account yourself. This is possible if the plans for the renovation have changed or if the depot is completely used up.

What are the changes since 2018?

From 2018 a significant change has taken place. As a result, the maximum mortgage depends on 100% of the home value and the renovation. For example, if you are allowed to borrow a maximum of 300,000 euros and you have found a new house that requires a major renovation of 40,000 euros. In that case, the market value of the home may not exceed 260,000 euros. It is useful to have information about this before you start looking for a house.

Would you like to request a construction deposit?

Are you curious about what you can get in mortgage and how much in construction deposit you can borrow? Please contact us. Request a construction deposit? Schedule a call appointment for free.

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