The Right Home Financing Thanks to Low Interest Rates
It could not be deeper: the interest currently payable on a Home Financing is near the absolute low. No wonder, then, that more building pre-demands are being made at the offices, which want to raise something new on fallow building land. However, anyone who reacts too hastily now goes totally wrong with this very serious decision. What to look out for when you approach real estate financing with the necessary equity capital.
The devil is in the details
Depending on your personal situation, the amount of own funds and previous forms of savings, there are two forms of financing in Germany: By a building loan or in the form of building savings. For those who have been waiting for the allocation phase for a long time with one or more Bauspar contracts, the savings made over the years now pay off. They benefit from the fact that they can start work with calculable costs due to the pre-defined financing framework. On the other hand, the mortgage loan, ie a normal annuity loan, carries considerably more significant risks. It is important to weigh this up.
It is therefore not without reason that banks are increasingly promoting real estate financing, since debit interest commitments can be fixed for ten years or more. For the bank, this is always a good deal, because with the safety of the house in the background a credit risk is often excluded. But what does that mean for the buyer, who, driven by favorable interest rates, now pushes aside all the rules of reason.
Ten Tips for Proper Real Estate Financing:
- Increasingly, it is possible to use flexible loans for financing. In return for a low interest surcharge or even for free, life insurances particularly benefit their customers, who benefit from variable installments and broad special repayment rights . Therefore, keep in mind that the uncertainties of the labor market do not stop at your position. Jobs are streamlined, outsourced to cheaper foreign countries, or offered on other terms, often in temporary employment agencies. Statistically and academically, academics and high-skilled workers have the least concerns, but have not been spared in the past.
- Pay attention to wording in the contract that is based on special repayments. Here it is important to formulate precise conditions for this. Often, this type of eradication is restricted, for example, in the form that a minimum sum is necessary. Other banks, on the other hand, only allow this at fixed deadlines, which in turn restricts you during good economic times. Make a plan for this, at which time you pay off a larger amount. Therefore, calculate an amount x symbolically on the Annuity and set this money aside. Only those who take advantage of these opportunities will be in a comfortable position to include a noticeably higher amount than repayments in the monthly installment.
- Write down your loan for 15 or 20 years. These variants are barely more expensive than a conventional ten-year loan, but will put you in the lucky position of having full flexibility in terms of early redemption from the age of eleven. In that case, the block will no longer be available, so that you can pay back all or part of it with 6 months' notice.
- Withdraw independent consultants. So plan what kind of funding you need. What is your equity, what rate is possible (even in the meantime unemployment or loss of earnings) monthly in each case. A detailed consultation costs up to 150 euros, and is also offered by the consumer centers.
- Avoid unnecessary costs by comparing providers based on the effective rate . To this end, you give a fixed financing framework to savings banks, cooperative banks and private banks locally. In doing so, you pay attention to additional additional costs, such as estimation fees or provisioning interest.
- Use state subsidy programs by searching for suitable programs on the KfW Förderbank website. KfW energy-efficient houses as well as corresponding modernizations are being financed at low interest rates. In addition, it grants loans up to 30% of the total cost, so it is a real alternative.
- Make use of regional subsidies, such as home loans or home allowances, which are used by families with children. In most cases, the city or district administration is responsible.
- In addition, more and more cities and towns offer cheap loans or cheap building land to attract families. This under the Project "Action Pro Home" & ldquo; You can take advantage of this practice in just a few clicks.
- If you take it a bit bigger and renovate listed property, you benefit from a high tax deduction. For example, the tax office recognizes 9 percent of the refurbishment costs as a special edition for more than ten years. Contact your tax office for this and note that work on it may begin only after the conclusion of the sales contract.
- Last but not least, I would like to point out the state Rieser funding: In future you will receive allowances and tax benefits for repaying the loan
Rent versus property
If you look at the above points, you'll get an initial overview of the pitfalls that exist. It should also be noted, however, that under Article 11 GG & quot; property is required & ldquo ;. You may occasionally have problems getting cash out of your property as the price is subject to fluctuations in the real estate market. In addition, you must be aware that work such as development and development costs, road and pavement renewal, cost points that you as the future owner must open up the previous rental charges.
Calculate for reasonable reasons, with at least 2 percent repayment. You need to know how to calculate loans and annuities. The annual rate is as high as the interest rate plus one percent of the financing amount. Assuming 100,000 euros and a currently rather high interest of 4 percent and a repayment of one percent, the rate is 416.67 euros per month. In this case, without any special repayments or repayments, you will need more than 40 years to get paid.
If we take 2 percent, the whole thing looks a lot different. This increases the monthly rate, but your loan will be cleared faster and thus much cheaper. Now, after 28 years you have a debt-free house , and also calculated an interest savings of over 73,000 euros over the entire period. And this with only 167 euros in additional burden, every month.
It becomes clear that you have to create a stable foundation in addition to the already important factors, such as location, building fabric, renovation backlog and the like. So it will not pay to faint just because of small interest hikes , and to buy like a obsessed real estate and finance it below value. Get involved with your spouse and think about what your plan B looks like in the event of a rate hike. With scarcely calculating homeowner wishes, often only a seemingly small increase in interest makes 100 euros and more, which does not often mean the end of this odyssey.
All should therefore be aware that you should take the time and compensate for the disadvantages of the rate by choosing a higher repayment right from the beginning. Only in this way is it possible to have enough headwater even in difficult times, so that you do not have to go from boarding the MS home even with the slightest shock. In addition, be aware that running costs as well as unpredictable damage are additional burdens that you, as the owner, have to solve in the future and not in the community of solidarity. Artikelbild: © spectrumblue / Shutterstock
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