Housing financing using one of the known forms of loan

Purchase of a property

Purchase of a property 

Very few people are financially able to buy an apartment from banks without financial resources.

How housing finance is structured depends on various factors. There is suitable housing financing for almost every situation today.

Want to build, they have to think beforehand in which way they want to finance the project. The credit institutions offer very different types of housing finance. The most common are:

  • Loans with ongoing repayment (classic form of loan with consistently high rates)
  • Annuity loan (including fixed interest and monthly loan installments with repayment and interest portion)
  • Building society contract (consisting of savings and real estate loan)
  • Housing financing through life insurance (with installments for the interest, the loan amount is offset against the maturity benefit)
  • Residential Riester (for soldiers, civil servants, judges and employees with compulsory pension insurance)

Conditions for funding determined.

Conditions for funding determined.

  • In a first conversation with the lender’s advisor, you should be as fully informed as possible and not be afraid to ask questions or follow up on difficulties in understanding. The consultant is obliged to explain all contract details to the customer as best as possible.

The two most important factors when financing a home are equity and debt. Equity means housing financing all the financial resources that the borrower can raise himself. The higher this amount, the less debt it needs to finance housing and ultimately the lower the interest rate on the loan amount.

You need money from the bank. Equity in the context of housing financing includes:

  • Savings
  • Time deposit
  • Credit from building society contracts
  • Government grants
  • Muscle mortgage (property or work performed during construction)

For a solid housing financing, the lenders usually set between 15 and 20% as equity. There is also financing without equity, but such full financing is much more expensive and longer.

Use financing calculator. These are available on most websites and can provide an overview of how different levels of equity, a shorter or longer term and the desired repayment affect the financial burden that awaits you.