Best Loans for Home Purchase
Who offers the best offers? They also have a solid basis for buying a home, because less funding is needed. The best foundation is equity. Real estate acquisition Where are the best long-term interest loans from Good finance?? Builders should consider taking out a subsidized loan from the Intrasavings bank.
Housing finance – the 3 most common types of financing
Anyone who wants to buy a home or a property must take care of how the building should be financed. Which loan pays off? Which credit period should you specify? Now let’s focus on the three most popular forms of home equity financing. This is the most popular type of home finance.
You act as a borrower at your house bank and negotiate a loan. For the USD area, you now have to repay monthly or quarterly in a repayment installment. This has the great advantage that the tariff is always the same. The sentence consists of two different components.
Because the interest rate is always the same, you pay more interest at the beginning than you would pay back. If you can not repay the loan with a final installment, you need to think about follow-up financing. Here, the full financing of real estate is an option. However, you will not find them at every financial institution.
But for the bank itself, the risk is very high, which is why the expenses are usually relatively high. This has the disadvantage that the financing amount for a residential building is available relatively quickly after conclusion of the contract. What is the best financing for home financing?
If you do not have enough equity capital, the current good interest rate situation is an advantage and full financing is a good decision.
Real Estate Loans: How to get the right lender
Plan security – this makes the standard bank loan so popular with builders and homeowners. With such an “annuity loan” the monthly installment of the home loan is always the same. The basic principle is simple: the interest rate is fixed for a certain period – for example, for five, ten or fifteen years (fixed interest rate).
These are composed of the interest due at the beginning and a repayment contribution, which is also determined at the beginning. Example: For a loan of USD 100,000, the interest rate is five percentage points per year at USD 5,000. The fixed repayment of one percentage point of the original loan amounts to 1000 USD. For example, 6000 USD go to the house bank annually – and thus 500 USD per year.
After expiry of the fixed interest period, the loan is usually extended. Thereafter, the current interest rate applies. For lending, credit institutions need a certain amount of own funds. It usually has to make up 20 per cent of the total effort. So if you have 40,000 USD at the top, the family house can be 200,000 USD – no, it may amount to a maximum of 190,000 USD.
Because the purchase price is at least five percent of the cost. Not everyone can enjoy the favorable interest rates that the bank is currently promoting. According to the board of trustees, the best interest rate applies to a loan up to 60 per cent of the land price. A 100 percent financing is also possible – but usually with high premiums.
Basically, the more own funds, the cheaper the loan. What is the calculation of the monthly credit? The monthly installment is the second limiting point for the home savings after capital. First, set the maximum amount that you can spend on the installment for each started calendar month, and then set the actual interest rate.
As a precaution, 0.5 percentage points are added to the lowest price; the cheapest prices usually only apply to very stable bank customers. The key to the highest possible real estate price is the combination of equity capital and the maximum rate you can afford. What can be done to reduce interest rates? Apply for loans from financial intermediaries and discount banks that are easy to obtain on the web.
Look at the conditions of the bank. For example, you get better interest if your interest rate is only 60 rather than 80 percentage points of the value of the property. The situation is similar when the amount of credit rises – often, for example, loans starting at USD 100,000 will be slightly cheaper. Arrange a larger initial repayment than the normal credit volume of one percentage point.
Some banks grant a small interest rebate for “quick repayments”. Short-term maturities bring cost savings: A loan of € 150,000 with a five-year fixed rate may be over € 100 less per month than a loan with a fifteen-year bond. If you sell the property prematurely, you will generally get better out of the loan than with a longer lease.
If you in between z. For example, through inheritance or an increased salary, you can repay part of your receivables and you can save more interest after five years. Ironically, interest rates are still low today. On the other hand, you can not pay more than 500 USD per calendar month at short-term fixed interest rates after five years.
When comparing loan offers, you should never look at the nominal interest rate (interest that you have to pay for your loan transaction per year), but always the effective interest rate (which also includes bank processing and brokerage fees); this reflects the funds more realistic. These include, for example, estimation costs, commission costs if you do not call up the document immediately, or surcharges for the payment of partial amounts.
Always try to keep the interest rate as low as possible to avoid costly interest rates. In the beginning you should invest as much capital as possible to achieve this. If the financial room for maneuver is large enough, it is better to vote with the house bank two instead of one initial repayment of one percentage point per year – and if possible three.
If the fixed-interest period expires after five, ten or fifteen years, you take back all your capital and thus reduce your debt. This is a truism, but many home buyers do not pay attention to it: the lowest interest payments are always made by the one with the lowest debt. Before negotiating a loan with the house bank, you should prepare yourself well.
Compare the terms and conditions of multiple banks and look for additional costs, such as determining the mortgage lending value – this is the amount of your property on which the house bank depends on the maximum amount of your loan. It is more likely that the house bank helps you with additional costs than with the demand for low rates.
Also, look for a provision in the Loan Agreement that allows the house bank to sell its loan claim to another person only if you agree. In this way, one excludes what has happened to many debtors in the past few years: Companies such. B. the company Dr. Little ones are usually at the top of the lowest lenders. High earning and in good hands, with a lot of capital and as a hedge a high quality residential building in a good location.
Interest rates have risen for most consumers. However, they are often still below the bank average. Discount loan brokers receive funds from all banks across the country. They also relieve the banks of much effort and time. Special requests such as the possibility of an extraordinary repayment, a term of less than five or more than fifteen years are not always taken into account.
It must be able to estimate the asset, calculate the potential loan amount from its salary and living expenses, and settle it with the burden calculated from the amount of the loan and the interest. Although loans become more expensive as interest rates increase, this can certainly pay off especially in low-interest phases such as the current one.
Because a loan will probably never be as cheap as it is now. Debt rescheduling, waiting or securing the advantageous interest rates for the subsequent loan with a so-called forward loan. In general, it makes no sense to convert the previous loan agreement into a new, cheaper, as the bank requires high costs. Term loans are sometimes granted several years in advance – but with a substantial interest premium: one percent for two years, a four-year percentage.
“However, you never knew how interest rates would develop.” “Anyone who wants to take on the interest premium on a forward loan can now secure a favorable interest rate level. This chart shows whether a term loan for a follow-up loan will pay for itself in two years, depending on the interest rate development.
The undecided offers another alternative: a forward loan with an exit clause. If the interest is then below the agreed value, the loan does not have to be taken up. If the interest rises sharply, the consumer pays more than with a normal term loan – but with savings compared to the then valid interest. Before concluding a contract, he also advises only because of the low interest rates.
The time to check a loan application must be in any case.