Real estate loan | Compare real estate financing

Buying a property is such a big investment for many people that the available capital is not enough. You also have to borrow money to finance the mortgage.

Various building blocks are available for this purpose, such as state subsidies, home savings loans, KfW loans or real estate loans. The most common form of mortgage lending is the mortgage loan, for which the property serves as collateral. Private individuals normally use the so-called annuity loan, in which fixed interest rates and a fixed monthly installment are agreed for the entire term.

The rate is composed of the interest and the agreed repayment installment. At the moment, interest rates are very low. Therefore, it is worth considering to agree a higher initial repayment than the usual 1%.

Then the real estate loan is paid off faster. The decisive factor, however, is that the owner of the property can pay the monthly installment in the long term without being too restrictive or even having difficulty in financing the mortgage. For the real estate loan usually a fixed interest period of five, ten or 15 years applies. But it can also be agreed to a longer term.

Mortgage lending with fixed interest

A real estate loan is currently available at historically low interest rates. Even with a fixed interest rate of 15 years, they are sometimes below 3%.

It is worthwhile in any case to compare the conditions of different providers carefully. Because it is about large sums, even a tenth of a difference means a lot of money. When comparing comes not on the debit interest, but on the APR, because it also includes all utilities and fees. Anyone who informs themselves on the Internet should not forget that banks and other mortgage lenders calculate their specific offer individually.

They include income and assets of the customer and the amount of equity. If you make special repayments, you may have to pay a slightly higher interest rate. For this he has the opportunity, for example, in an inheritance or a salary increase to partially replace the real estate loan prematurely.

Do not forget follow-up financing

In many cases, mortgage lending is not fully paid off when interest rate lockout expires. Then a follow-up financing for the property is required. In principle, the same rules apply as for initial financing. In times of low interest rates, it can be worthwhile to secure follow-up financing in advance with a so-called forward loan. For a certain fee, the current interest rate will then be fixed at the time the follow-on financing is required. However, this is a speculation for future development. Because it can happen that interest rates continue to fall and follow-up financing becomes more expensive than necessary.

Loans for real estate abroad

Loans for real estate abroad

A property abroad is increasingly in demand. Usually, however, such is acquired only in a later stage of life. Therefore, it is often necessary to agree on a higher eradication. It is advisable to first check a financing through a German bank. A foreign real estate can basically be financed by a mortgage loan or a building society loan.

The providers usually take care of all formalities such as purchase contract, appraiser, mortgage purchase and land registry. However, there are extra charges for this.

Foreign property through an international financial institution

Financing abroad can be considerably more time-consuming. Thus, the prospect will often find that the interest rates are sometimes much higher than in this country. In the case of real estate outside the euro area, there is also a certain foreign currency risk as the loan taken out is subject to currency fluctuations.

And, of course, caution is also advised when it comes to foreign lock offers, which are also fraught with numerous risks. These risks can be hedged to a certain extent with the help of foreign currency bonds or special certificates. However, it should be noted that this increases the financing once again considerably.

At the same time, in many countries there is only one variable interest rate in the area of ​​mortgage lending. In countries such as Spain, on the other hand, it can sometimes be very difficult to identify the actual costs of financing. In addition, expert’s fees and fees for a land register extract are due in advance.

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