If you dream of your own home, of security and security in old age, you can either buy a property or build or expand it. Here the topic of loans quickly comes to the table and the trip to the bank follows. But is the previous house bank really the right partner for this long time in which complex life can change every day?
We would therefore like to inform you optimally about applying for a building loan, and have worked out a comparison for a good overview with our financial editors and experienced experts. If you would also like to read more about the topic or are interested in specific aspects, you can find a comprehensive guide under the comparison. Find the best building loan for you now and apply for it online!
Home loan in check: the most important things at a glance
What a home loan should bring:
- low effective interest rate
- as little or better no processing fees
- little or no estimation costs
- firmly agreed options for free special repayments (makes early redemptions possible)
- low or no prepayment penalty
- Long fixed interest period if the building rate is favorable when the loan is taken out
- short fixed interest period if the interest rate is unfavorable
What can a home loan be used for?
A building loan is only granted for the financing of real estate, ie acquisition, or for construction measures. For this reason, loan amounts from USD 30,000 are usually only considered. The issuing bank usually expects between 20-30 percent equity. This share results from the loan limit for the property.
There is no upper limit to the amount of the building loan. It depends on the financial feasibility of the overall project.
Compare and apply for a home loan – the following criteria are important
A related property is essential for the issuance of a building loan. This can be a piece of land, a condominium, or a house with a piece of land, but also a planned new building or a renovation as part of a renovation. It is important that the property in question can be mortgaged so that a mortgage can be taken out, which in turn serves as security for the creditors. For this purpose, a land charge is noted in the land register, which gives the creditor, usually the bank, security.
Building loans are characterized by long terms that can run up to 35 years before follow-up financing may become necessary. They also include a so-called fixed interest period, which can be set to five, ten, 15 or more years. This commitment period guarantees the borrower a transparently calculable constant interest rate.
As a rule, however, the sufficient bank will structure the term regardless of the duration of the fixed interest period. It is advisable to renegotiate here, because after the fixed interest period has expired, renegotiation is necessary. Unfortunately, the interest rate level is then far less favorable than at the beginning.
This in turn also creates the possibility of negotiating with other banks about a cheaper loan for debt rescheduling if the bank’s new offer no longer appears to be cheap after the fixed interest rate has expired.
It is also possible to switch before the interest rate fixation expires, but then the bank usually requires prepayment penalty, which can nullify the new offer. Contracts that have a fixed interest rate of more than 10 years and already have a contract term of 10 years can be terminated with a notice period of half a year according to the German Civil Code (BGB) without any prepayment penalty.
The best home loan should make life easier and not end up destroying the dream of home and family. In this nerve-racking time, anyone who builds needs a reliable partner who, in your sense, is counting on the pointed pen. The criteria mentioned contain immense scope; A relatively flexible building loan, which can be adapted to your individual life situation, is the be-all and end-all. So, as building loan checks show, there is also the option of repayments of between 1 and 10 percent or to adjust them in between free of charge. Free special repayments of up to 5 percent are now just as common as several months of interest-free provision.The latter is particularly important for construction projects if the sum is paid according to the progress of the construction.
Since the number of providers is large, a comparison of construction loans is advisable if the partner should suit you well for such a long-term commitment. Only every consumer can find out which is the best building loan for themselves within the framework of a building loan comparison.