So-called annuity loans are called most construction loans, whereby the customer always has to pay the same amount monthly, which is composed of the repayment and interest portion. If you want to apply for a building loan, some papers must be submitted to the bank or building society. The creditworthiness of the customer is first determined, which means that he is able to repay the credit plus interest, since the interest has been based on their creditworthiness since 2007.
In the case of private individuals, proof of income of 3 months is required, and a household bill is drawn up with all fixed expenses. Low interest rates are good, but more important is the monthly charge, which should also include scope for the unexpected.
For self-employed people, the balance sheets are viewed
Based on this evidence, the institute determines whether the loan installments are sustainable with the income.
Of course, you should clarify everything related to financing in advance. Then there would be the effective interest rate, which should be low, and processing fees and estimation costs would have to cost very little or nothing that should be possible with good institutions.
Then there is the possibility of a special repayment that should be observed and must be contractually agreed, which means that I get money unexpectedly so I can bring it into the home loan. The equity component should also be low and the fixed interest period should be long in periods with favorable, ie low, interest rates, and short with less favorable, ie higher interest rates. With a little equity in something like 25% or more, interest rates can of course be kept low. This is a small glimpse of what should be considered, although there are of course some things that should be clarified. You should also check all funding options that can significantly reduce the monthly burden. There is so much to note that good advice is very important and you should take a lot of time and that is also ensured at a good bank.
Several financial institutions and compare the conditions
The lower the equity capital, the more expensive the building loan becomes, since the banks do not insure the customer and therefore have to collect higher interest rates. If you plan in the long term, a home loan savings contract is definitely a good solution because the state also pays and thus the whole thing becomes a little cheaper.
If you have already run a home savings contract, the minimum contract term has been met and about 50% paid in, it is easiest since the conditions have been set in advance and are usually cheaper.
There are also banks that make financing without equity
But you have to have a medium to good income that is also secured. There is also 120% funding that is mostly used by young academics, where more is paid than the purchase price. You can then pay the costs for mostly expensive brokers and notaries, as well as the entry in the land register and property tax, if necessary a new kitchen. You should only take advantage of this type of construction loan if you have a good income in the long term, because the risks of debt are high.
Recently there is also the so-called residential giant, which means building or buying a home as a pension. Since the retirement pension is recognized as equity before retirement age, the own contribution to the building loan is higher.