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Financing residual debt

When selling a home, it may happen that the mortgage cannot be fully repaid. We call the portion of the mortgage that remains the residual debt. This does not disappear with the sale - the residual debt must be paid back.

Consumptive credit

Are you not buying another home after the sale? Then the residual debt becomes a consumer credit, initially with the lender of the not fully repaid mortgage. Probably in the form of a personal loan . It is worth checking whether that money can perhaps be borrowed more cheaply elsewhere. Comparing loan rates is not superfluous. By transferring the loan to another lender, you may be able to save on monthly costs. Or get rid of the loan faster.

You can also opt for a revolving credit . With residual debt financing, for loans taken out before 1 January 2018, the interest is tax-deductible for a maximum of 15 years. There is no requirement to repay this deduction. As a result, a revolving credit can also be used. In addition, it is important not to use the credit for any other purpose than the residual debt. If you do, it will become an impossible to oversee from a tax perspective.

Co-financing in a new mortgage

Do you buy a new home at a loss after the sale? Then it may be possible to include the residual debt in the new mortgage. The lenders have room for this within the Code of Conduct for Mortgage Financing and also within the standards of the National Mortgage Guarantee ( NHG ). They may grant you a higher mortgage than usual. An amount above the normal maximum in relation to the value of the new home is permitted. However, not all lenders are willing to actually offer this option to their customers.

If it is not possible to include the residual debt in the new mortgage, then consumer financing is the only option. That does not mean that it is impossible to buy another house. However, the monthly costs of the personal loan or revolving credit do affect the maximum loan amount for the new mortgage - and thus the maximum purchase price for the new home.