With a real estate loan, you can buy a house or apartment. These loans are offered by banks, housing associations or other lenders and are often backed by a mortgage on your property. In Real Estate Finance: What is a Real Estate Loan? A real estate loan is used to finance residential real estate or renovate old buildings. The financed real estate serves as collateral for the real estate loan.
Real estate loans – biggest mistakes
Error 1: If I have discovered a property, it goes to my house bank. On the one hand, the owners of the property or plot of land expect you to immediately go with him to the notary companion, if there is a real interest in the purchase. If not, the property is soon gone. If you do not receive a real estate loan after attestation, the contract must be dissolved at your expense.
Even if you receive a loan offer from your bank early before the notarial certification, this does not necessarily have to be particularly profitable. Do not give anything away unnecessarily, a good loan broker usually gets an interesting bid as the bank, as foreign banks offer particularly good conditions for new customers. Mistake 3: I have a real estate loan with no own funds.
Mortgage lending was also carried out by banks without own funds until not so long ago. Since the financial crisis, banks have been forced by law to assume more responsibility themselves. Young researchers with high revenues have the best chance of receiving funding with little or no capital. Even if you have agreed on a low repayment rate with a house bank in order to get the monthly loan rate low, the house bank does not yet have to support this.
Starting in 2016, credit institutions will have to check whether a borrower can repay the money until retirement, or how he would otherwise serve it in old age. As a rule, repayment rates of 1 or 1.5% are no longer possible; Depending on the age of the borrower, loan volume, etc., a house bank can also demand a repayment of 3, 4 or even 5%.
A sufficiently high repayment rate is also in the interest of the borrower – if feasible for him – since it then becomes faster debt-free. After the end of the debit interest obligation, eg after 10 or 15 years fixed interest, the residual debt with high repayment installments is significantly lower than the original loan amount.
Real estate loans in comparison
Do you want to know which real estate loans are suitable for financing? Are you interested in calculating different mortgage lending variants with suitable loan calculators? You have already found a cheap real estate loan? The appropriate answers to all inquiries can be found on this or on the respective sub-pages. Which real estate loan is the right one for my project?
Where a real estate loan can be taken up, there are a variety of possibilities. The repayment options are also different. For an overview of all loan forms with a brief description, see Loan Types. These and many other questions can be found under the heading: Loans with constant repayments – so-called annuities – are the most common, but by far not the only possible repayment.
The specific features of each type of loan in terms of repayment are presented. For detailed information, please click on the appropriate keyword. A real estate loan or a loan may have other special features depending on the purpose. For example, home loans can help you figure out how to pay off a mortgage loan early and what you need to be aware of when closing it.