Housing Challenges

Tracy and I have been looking into buying a house, and boy is it a tricky proposition. On the one hand, it shouldn’t be that hard of a deal: I have a permanent contract, a good salary, and a solid record of paying rent for over a decade. However, there’s also a huge snag: I also have a massive student debt. When I started studying, the rules were that student debt would not be factored into considerations regarding buying a house. These days, however, those rules have changed, and they’re crippling us.

Without going too much into detail, what we did was figure out how high a mortgage we could cover if we payed the same amount we currently do into rent into a mortage instead. As it turns out, that was a decent chunk of money that could get us into quite an acceptable home. In fact, we’d found some homes that we’d like to explore (and one that we absolutely fell in love with) and for those, we’d even be paying less in mortgage than we would do in rent. On top of that, buying a first house comes with all sorts of advantages, such as municipal subsidies to make it more sustainable, and tax breaks based on your mortage interest rates, to name two. So, we figured, all of this is great – we can totally afford buying a house.

The banks, however, have a different idea. Despite us already paying the effective mortage (in fact, our net rent is higher than the gross mortgage!), the banks, in short, argue that we can’t carry that payment. The problem is, as I mentioned, my massive student debt. Banks are required to factor that into the mortgage, and to deduct a percentage of the student debt from the maximum mortgage. So, despite us demonstrably carrying this financial load, as well as the fact that we’d in fact be living cheaper with the mortgage than without, according to the rules, this is irrelevant. We’ve spoken to a mortgage advisor, and he as well basically said it’s a case of it making no sense but they have to follow those rules.

Now, to me, this already seems somewhat off. It gets even more absurd, however. You see, if I had decided to buy a house right after I graduated, this wouldn’t have been a problem. In the Netherlands, you only start paying off your student debt a year after graduation. Since I wouldn’t have been paying off my student debt that first year, they wouldn’t have to factor it. So, despite the situation being functionally and practically the same, it wouldn’t have mattered. However, who on earth would buy a house right after graduation? At that point, no company here will have given you a permanent contract (the standard usually is two fixed-term contracts before issuing a permanent contract for first jobs).

Moreover, the rules were changed during my time as a student, and again after my graduation. So, again, had I bought a house earlier, I wouldn’t have had any of these issues. However, at that time, I was still being bounced between fixed-term contracts and payroll constructions. I didn’t actually get a permanent contract until 2018, despite working in the same program since 2012. Still, the fun doesn’t end there!

The Netherlands actually had a pretty lenient student debt program at my time, still. Not as lenient as the generation before me, but better than what came after. The interest rate on my student debt is incredibly low (and I think at the moment it’s actually 0%). On top of that, after fifteen years of paying as much as I can each month, the entire debt is forgiven. I have six years and eight months left on that, with a debt that’s so high that I almost couldn’t pay it off. I mean, sure, if Tracy and I moved into a shoebox, ate rice and beans daily, I got a second job, and so on, I could chip away at it and have it paid off it, say, a little over six years. See what I’m getting at? At this point, the system is encouraging me, rather, to save up my money so I could buy a house when my student debt is done. Surely, that’s completely wrong? Surely, the system should be set up to encourage me to buy a house? That would mean that a highly-educated citizen settles down in the country that paid for his education, and contributes more to the economy by owning a house. Let alone that owning a house will benefit the economy by the time I retire, because my costs will be far lower, leaving me more financially stable and less dependent on government money.

What is most likely for us right now is to see if we can wrangle a semi-decent place to live with what mortgage we could get. However, the large problem we have is that most places in the Netherlands are multi-story, which is difficult for Tracy. With the mortgage we can get, it’ll also be a small house, with most of the ones we’ve seen in our range having tight, narrow stairwells. So, again, we’re almost encouraged to not buy through this emergent property of the system.

I’d be lying if I said it hadn’t gotten us down. Particularly given the amazing house that we’d found for the full mortgage that we can’t get. It was all ground floor. Close to my work yet in a smaller town to suit Tracy’s needs. It had a large garden, allowing us to save on money by growing crops. It pretty much suited us exactly. But unless the owners decide to sell the house for about 75% of its current asking price, or some mysterious distant relative leaves us enough to pay off a huge student debt, the boat’s sailed on that one.

So, for now, we’re scouring housing sites for that diamond in the rough. That tiny little house that’s just at the right distance away from work to be affordable. That little place that has enough promise to have us survive there for at least 7 years, at which point we can sell it for a good house. Or, perhaps that one mystery house, that magic little spot that’s good enough to be this cheap, yet offers enough to make us want to live there.

Either way, tear down capitalism and stomp on its ashes.

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