A student loan ensures a much lower maximum mortgage. Not every mortgage advisor treats this nicely. They simply break the rules to get customers.
Much less mortgage due to study debt
Last week I received a call from a colleague asking what I would do in his situation. This is because the following applies. His client has bought a house and also has a study debt. By not including the study debt in the calculation for the maximum mortgage, it is possible to buy the property. This adviser was right to include the study debt in the calculation, which means that the mortgage can be made with great difficulty through considerable (legal) detours.
Student debt not a problem for a mortgage?
However, he was told a few days later by his client that he had gone to another consultant. The reason: the mortgage was not a problem. The study debt did not have to be taken into account as the customer still had to pay off. The latter is of course nonsense.
Advisor is breaking the rules
On January 27, 2016 I wrote the blog Study Debt Trick. Everyone could read the answer that I had received from the Netherlands Authority for the Financial Markets (AFM) via email:
When determining the maximum financing burden for obtaining a mortgage, all financial obligations of the customer must be taken into account (Article 3. Temporary Regulation on mortgage credit). A study debt is also a financial obligation and therefore counts. This applies to a mortgage with and without NHG. If a (temporary) delay in paying off the student loan has been obtained, mortgage providers must nevertheless take the student loan into account. If they do not do so, they will violate laws and regulations. Failure to include the study debt when taking out a mortgage can cause problems in the future and is therefore not in the interest of the consumer.
My colleague mortgage adviser?
The question now is whether another adviser should report this to the AFM. In other words: someone must link someone else. These are always very difficult things. By not reporting this, this consultant will continue to use the same method.
In addition, the client will make “positive advertising” positive advertising for this consultant. Birthdays usually tell who the mortgage was taken out with. There is also a good chance that this customer will be told once. Moreover, it is also briefly stated that the other advisor could “not” arrange it because he took the study debt with him. Buyers with study debts will therefore go to this adviser.
In order to break this circle, this adviser must therefore be tapped on his fingers. In the future, he and his colleagues will have to follow the rules that have been drawn up. So there is no other option than to report this to the AFM.
Remaining debt in case of forced sale of stories by adviser
What are the consequences for the customer, by the way? This only gets into trouble if he does not pay the mortgage charges. In the event of a forced sale with a residual debt, the residual debt will not be reimbursed by NHG or the bank.
The customer will then have to recover the residual debt from the mortgage adviser. It does have professional liability insurance, but it will not provide cover. The consultant will therefore have to pay everything out of his own pocket.
Financial problem for the customer
I do not have to tell you that there is very little chance that you will be paid nicely. Of course there is little chance of someone getting into financial trouble. However, the customer does not know what the consequences are if this does happen.