Tips and tricks for real estate financing
The demand for mortgage lending continues to increase, the purchase of real estate is still in the focus of consumers. And rightly so, because the real estate is still one of the best types of old-age provision. We show what is important in the purchase and the real estate financing and how you can save.
- Purchase price and mortgage lending value should not be too far apart.
- Real estate financing becomes more difficult for very individual properties.
- The more equity, the better.
- The monthly load should still leave room for unexpected expenses.
- Interest costs can be lowered with independent financing comparisons.
The selection of the object
A broker knows three reasons that speak for a specific property: the location, the location and the location.
It is undisputed that the situation on the one hand determines the purchase price, but also on the resaleability of the object. Banks generally assume that a loan is not properly serviced. Against this background they create their loan offer.
This will be less favorable if, for example, the property is a 1950s house on the edge of a rural town. By contrast, institutions tend to be more open-minded when the house or apartment is in a preferred location, or at least in a place with a solid economy.
So it pays to maybe finance 30,000 euros more and find a more attractive property. Incidentally, collector’s items with a high degree of individual character are generally more difficult to finance.
Beware of zero-percent small loans
It is tempting to buy the TV here because the phone uses zero-percent financing. However, no interest does not mean that the borrowing is not deposited in the credit bureau.
Banks become cautious when the credit bureau information lists several current loans, regardless of the amount. Who buys many trifles on the pump, could possibly have difficulties in the view of the bank, to carry a mortgage. Responsible handling of finances is always a plus point when making a financing request.
Stay realistic on the purchase price
Sellers of a property sometimes have unrealistic ideas about the value of the house or apartment. However, if they encounter a buyer who has found his dream home, these ideas may be viable.
Banks, however, calculate the value of an object not only on the basis of the possible market value, but also on the basis of the mortgage lending value. This value disregards supply and demand and is limited only to the actual value of the object. The greater the discrepancy between the mortgage lending value and the purchase price, the lower the chance of financing. Not to mention that a loan in this case would not be advisable.
As much equity as possible
Those who contribute their maximum possible equity will save in two ways. On the one hand, the proportion of external financing decreases in the purchase price, which in turn means lower interest rates. On the other hand, the interest rate for mortgage lending is based on the amount of own funds. The more equity capital the buyer raises, the lower the interest rate. The staggering is usually based on the following mortgage lending values:
- Up to 40 percent
- Up to 60 percent
- Up to 80 percent
- Over 80 percent
Equity is not just your own money from the savings account or stock sales. Relatives loans and employer loans also have equity character. In new buildings is still the so-called own contribution, the muscle mortgage, in addition.
Market comparison saves money
Use a comparison calculator. You will then see at a glance which institutes are suitable for you. Our mortgage calculator is equipped with numerous filter functions. This allows you to perfectly simulate your personal financing situation at home on the computer in advance.
Compare mortgage lending
Our mortgage calculator helps you to find the best mortgage lending:
Net loan amount: Running time: 5 years ten years 15 years 20 years Mortgage lending: 60% 80% repayment: 1 % 2% 3% 4% 5% 6% 7% 8th % 9% 10% full
Keep an eye on your own credit rating
You are only planning a real estate acquisition in the medium term? Then you can already influence the interest rates today. Banks check the credit bureau of the applicant in advance of financing. Who pays his bills on time, has a better credit bureau score than a consumer who collects reminders.
The same applies if life is not financed by credit. The better the credit bureau score, the better the interest rate offered by the bank. Incidentally, this does not only apply to mortgages, but also to installment loans.
The loan amount must be consistent
Rapidly rising real estate prices mean that some buyers put themselves under pressure and ultimately buys a property that is just so even more affordable. However, then fall vacations away, the membership in the sports club is terminated and dining visits are a thing of the past.
Buying a property should never be at the expense of quality of life. Therefore, it is nothing to break over the knee and decide on an object that despite monthly mortgage lending rate still leaves room for “life”. Our household calculator helps you to determine the appropriate financing framework.
Bundle existing loans
Buying a property is a new era in life for many consumers. A good time to reorganize the financial stuff as well. If you are servicing several small loans, you should consider bundling them into a loan, using cheaper interest rates and thus having more financial flexibility for the mortgage. Maybe there is even the possibility to incorporate the replacement of expensive old loans into the mortgage lending.
Independent market analysis for real estate financing
The Internet makes it possible that real estate buyers no longer have to bargain with the various banks to negotiate or steal time from financial advisers. A mortgage lending comparison shows the best deals.
Mortgage lenders, who are also listed in such a comparison, cooperate with 200, 300 or 400 financing companies. These include banks and building societies, but also, for example, pension funds. These intermediaries often offer the choice between a pure remote consultation by phone or e-mail and the personal conversation. In any case, they cover a large part of the market and find the right offer.
Do not hide financial sins
Once you have found the right partner, you have to be completely open about the financial situation. Nothing would be more annoying than receiving a funding cancellation at the last minute before the notary’s appointment.
Even if the financial vest is not completely white, experienced financial intermediaries will find solutions. The exceptions are, of course, hard credit bureau criteria such as arrest warrants, ongoing or pending bankruptcy proceedings and pending dunning procedures. In these cases, lending is excluded.
Lower ancillary labor costs
Depending on the federal state, the ancillary purchase costs may amount to around 14 percent of the purchase price. Brokerage commissions are capped by law. However, a broker may demand less than the maximum amount. The mediation was straightforward and the broker had little effort, can perhaps talk about the amount of the brokerage – a trial is definitely worth it.
The real estate transfer tax relates to land and to the object. On the other hand, non-taxable installations such as a fitted kitchen or fitted wardrobes are connected to the property. Set a serious value for it and inform the notary about which items are part of the purchase price, but do not count towards the property itself. These are noted on the last page of the purchase contract and deducted from the purchase price subject to land transfer tax.