Do you want to treat yourself or invest in your old-age provision in the long term? Your real estate security loan fulfills big desires with low interest rates and affordable rates.
Not only the property purchase or renovation can be financed with the property to secure loans. Real estate debt protection also ensures that consumer requests can be fulfilled easily and at low interest rates.
Even a negative Credit Bureau loses its terror when paid home ownership guarantees secure lending.
Real estate security loan – the only secure pension
The real estate market is boiling in Germany. Inexpensive credit with real estate security is helping more and more people to stay at home. The Cream Bank lays the cornerstone for the building boom and house purchases with zero percent in the base rate, penalty interest for investments. At the same time, the central bank is destroying all other classic forms of investment for old-age security.
The Cream Bank may still trust the USD as currency, but European monetary policy is not suitable for private pensions. Around 50 percent of people working today will hardly be able to live on their old age. This is not only due to the low income from Agenda 2010. Saving for private provision is huge – everything is not worth it until the money is gone and you take out life insurance.
Whether the USD is going down or not, your real estate security loan can carve your pension into stone. Real estate ownership has outlasted wars and survived currency reforms. Your own house is a guarantee for a rent-free age. If necessary, part of the house can be rented and thus ensures an evening of retirement without turning over any cent.
Prerequisites – this is how you can afford secure old-age provision
Today, real estate can even be financed as full financing, the low key interest rate makes the bill work. Nevertheless, property buyers should look back in the 80s when making their financing decision. At that time, rising key interest rates made real estate security loans more expensive than previously imaginable. At that time, many single-family houses changed owners through foreclosures.
If you have around 15-20 percent real equity, buy or build a house well prepared. Additional equity capital can be represented through in-house construction work, but it should not be the decisive basis for financing. Long-term financing at fixed interest rates is also important. This means that home builders and property buyers are protected from interest rate fluctuations for a long time.
Real estate owners can expect particularly low interest rates if the mortgage lending value is used up to a maximum of 60 percent. Each bank sets the mortgage lending value itself, but there are a few rule of thumb. What a property is actually worth can be determined approximately from the municipal purchase price collection of the responsible municipality, city or district administration.
How much credit is available – example
The door of the bank is open to property owners and future buyers for loan requests. Loans up to a maximum of the mortgage lending value of the property are considered to be financially reputable. The bank defines the mortgage lending value as the value that can be realized on sale, less a security discount. The required interest rate depends on how much of the potential loan volume is actually used.
For example, if the sale value of the property is USD 270,000, only about 90 percent of it is usually recognized as a mortgage lending value. The bank’s maximum credit limit would be a maximum of USD 243,000. The house is financed with a debt of 80 percent of the loan value. (194,000 USD). Real estate owners can hope for the cheapest interest rate on a loan with real estate security if up to 60 percent of the mortgage lending value is financed. (145,000 USD).
The rate at which the security is entered in the land register also influences the interest rate. Credit institutions only grant low-interest loans for purchases or new buildings if they have first-class protection. First rank means that in the event of an auction, subordinated creditors will only be served if the primary debt has been paid in full.
Mortgage with mortgage – security for all loan requests
Basically, there are various forms for real estate loans. The best known real estate loan is the mortgage. It is always based on a value-adding claim. Another option is to register the owner’s land charge. It can be opposed to a real claim, but it can also be entered without claim and is transferable.
For the real estate security loan, the property mortgage offers the optimal conditions for creditworthiness. It may be used to secure any loan, i.e. not for the purpose of acquiring or maintaining the property. Thus, of course, it can secure any consumer loan through the property.
This results in special opportunities for applying for a loan. Since consumer credit is not secured solely by personal creditworthiness, most credit institutions offer particularly low interest rates. Debt rescheduling loans with an extremely long term do not have to be associated with high risk interest premiums. Even if the creditworthiness is negative, extensive debt restructuring to restructure the finances is possible if the property’s value secures the loan.
Loan for retirees – home ownership ensures creditworthiness
The pension provision already mentioned by buying real estate at a young age not only saves rent when you retire. The real estate security loan keeps pensioners creditworthy despite the alarmingly low pension level.
Your budget bill for the loan repayment works because there are no rental costs. The lack of security through attachable income replaces security through home ownership. The bottom line is that the real estate loan is a sensible decision, first for purchase, later for any purpose.