A residual debt is the debt with the bank that remains when a house yields less after the sale than the mortgage debt that exists. For example, if a house with a mortgage of $ 200,000 is sold at a price of $ 180,000, the remaining debt is $ 20,000. A residual debt is therefore the difference between the proceeds and the mortgage debt. In many cases it is possible to finance a residual debt. There is a chance that a residual debt will arise after the sale of the property. Halfway through 2017, real estate researcher Calcasa published a report showing that some 340,000 homes in the Netherlands were still ‘under water’. This means that the mortgage debt is greater than the value of the home.
More and more, Residual debts are financed through consumption
Not everyone can finance their residual debt with their own resources. Then there are a number of options for financing the remaining debt.
- You make an arrangement with the bank where your current mortgage / residual debt is incurred. In consultation with this bank you can often come to a new arrangement in which you will repay the residual debt in installments.
- You buy a new home and in certain cases you can include the remaining debt in the new mortgage
- You view your options for financing the residual debt through a revolving credit or a personal loan, for example through Good Finance Financing.
The tax aspects
For residual debts that arise between 29 October 2012 and 1 January 2018, the interest that you pay on your residual debt is tax deductible for a maximum of 15 years. This scheme expired on January 1, 2018. Residual debts that (are) incurred after this date therefore do not have this tax benefit.
Don’t pay too much
Regardless of which option you choose, it is often worth investigating what is the best and most affordable option for you. For example, with Good Finance Financing there are often various options for financing your residual debt. And you we guarantee you, we always offer you the lowest possible interest rate, without additional costs. If you want to know, without obligation, what that means in your situation, request a no-obligation quote to finance your remaining debt.
Are you going to a new owner-occupied home?
Then we are happy to be of service and we first of all make clear what you should pay for a loan for the residual debt of your mortgage. This is easily done by requesting a quote from us, this only takes a few minutes of your time. Good Finance Financingen will let you know as soon as possible what the monthly period and the interest rate could be.
Please note, if you take out a new mortgage after taking out a loan, this loan could have consequences for the maximum mortgage amount that you can borrow. It is therefore wise to submit the situation to an independent mortgage adviser in advance. You are of course completely free to make your own choices, but you could have a look at our partner website wegwijs.nl. Here you can find more information about taking out a mortgage and comparing mortgage interest rates. You can also request a free consultation with one of our mortgage advisors. In this conversation you can discuss the situation and see what the most sensible approach is.
Your property not sold yet?
Even if your home is not yet sold, it is wise to investigate the various options in a timely manner. After all, you want to know what awaits you. So even when your home is still for sale, you can use our calculation tools to view an indication of the possible residual debt financing. Do you want to know exactly under what conditions you can borrow? No problem, request one or more quotes.
Good Finance believes in the do-it-yourself principle. You can orientate with us and request quotes. If these are satisfactory you can also close them. You decide what you want to borrow, from whom, at what monthly period and at what interest rate. You make the choices, we do the rest.
If you proceed to sign a financing contract, we will arrange it further with the notary or transfer the money to you after passing, this usually takes place within 2 weeks after receiving the signed contract complete with the necessary documents.
It is therefore a process in which you yourself determine how and whether you wish to finance the residual debt through Good Finance. But, definitely worth a look, because we offer the lowest possible consumer credit rates in the market! You can find more about our services here.