Borrowers have a lot to consider and consider when financing a property. It is not just a question of whether you want to buy or build. It usually makes sense to consult a specialist.
Gone are the days when banks could rely on the fact that the customers who held current accounts with them, at least to a large extent, also used them to build or buy houses.
The automation of payment transactions has meant that there is hardly any personal customer relationship in the private customer area of banks today. The supposed or actual comparability of all offers on the Internet leads many private individuals to believe that they would also be best advised on financial matters – even with mortgage lending.
The current interest rate situation seduces many who do not actually have the necessary savings to buy property. But many purchases with little or no equity will turn out to be a big problem after the end of the fixed rate phase of the loan agreement. Only those who have financed well can sleep well in the new apartment or house: with enough equity.
European Union complicates home finance
In fact, two decades ago, it was much easier to calculate mortgage lending: In 90 percent of all cases, it consisted of equity, home loan, and long-term mortgage loans, which, based on decades of experience, was a silver bullet – and probably still is today.
The EU has further complicated the situation with a directive on residential property financing, which bypassed market requirements in Germany. This stipulates that borrowers will have to protect their loans more extensively in the future than was previously the practice.
Build or buy
It makes a big difference whether you buy or build.
Purchase as a way to own your own property
Anyone who buys a condominium knows the purchase price and the follow-up costs – housing allowance – usually very well. Anyone who chooses their condominium based on their savings – 20 percent of the purchase price is a tried and tested experience – and finances the rest of the purchase price with a cheap loan is generally well served.
Anyone who buys an existing house always needs competent support not only on the technical side, but also on the financing side.
Anyone who buys an older house should arrange their financing in such a way that in addition to the installments for the purchase price, those for new heating or a new roof can also be paid – even if an appraiser has certified that the building is in excellent condition.
Building yourself is more complicated
If you want your dream house to be rebuilt, you not only need an architect for the construction plan, but also one for the building finance. You should always consider the often slightly more expensive method of having your dream home built at a fixed price.
The cost of access roads and garden design for new buildings may be an unknown factor in the calculation, but these are usually predictable.
Anyone who initially buys a piece of land, then hires an architect to draw up a plan that can be approved, and finally hires the companies personally for the construction, must take into account in the construction financing that payments have to be made over a long period of time. When preparing the construction finance, in addition to the property costs, the construction costs, the planning costs, the connection costs, any costs for the resident (road construction fees!), Notary, land register, provision commissions for loans or bridging loans must also be scheduled, which is common for anyone who is not professionally involved Overwhelmed. There are also numerous public funding programs that differ according to federal states and municipalities.
Consult a specialist in mortgage lending
Buying property is the financial adventure of a lifetime for most people, it should be well thought out and planned. With a little advice, it is possible for private individuals to finance the financing of a condominium.
When buying or building detached houses, however, you should rely on competent advice from a technical, financial and tax perspective and not be afraid of the costs.
So you should have the loan contract checked by a specialist, especially whenever the loan provider is not subject to the German supervisory authority – BaFin. Above all, the contractual agreements are important, which concern the deferral of loan installments and the early repayment of the loan by the borrower and the early termination options of both Sides.