Aimr Pubs

The world seems to me to do much of its toil for that which is not in any sense bread.

Main – Anyone who flirts with the purchase of a home can currently look forward to particularly favorable loans. In the face of the euro crisis, many people invest their money in real estate rather than in securities. What should be considered when buying a property?

 

Picture: House made of Euro bills 

Why is the purchase or construction of a house worthwhile at the moment?

Home builders and home buyers are currently paying a good three percent interest on ten-year loans. Even loans with 20 years fixed interest offer numerous banks for less than four percent interest. Even though prices have increased recently, real estate is still comparatively cheap in a ten-year comparison, according to the Federal Statistical Office.

Are real estate a good investment?

Real estate is not considered a return killer. However, according to consumer experts, they are a sound investment, especially in times of crisis. The value of a property is relatively safe – provided price, quality and location are right. In any case, a real estate purchase should be well considered. The consumer advice Bayern advises to look particularly at the so-called effective annual interest rates for loans.

How do I find the cheapest loan?

Here only a comparison of the different providers helps. For this, builders and buyers can use comparison computers on the Internet. Even consumer magazines and newspapers always provide current interest rates.

How does a construction loan work?

Loans for houses or apartments usually run for ten, 20 or 30 years. As a rule, interest rates are only set for a limited period of several years. If, for example, this so-called fixed interest period expires after ten years, the bank and the customer negotiate the extension of the loan. The builder can then also umschulden and switch to a cheaper provider. Consumers should seek new offers several months before the deadline expires.

Are the credit rates always fixed?

In itself, fixed monthly installments are agreed. However, many banks are granting construction credits with special repayment rights – the right to free repayment of money in addition to the agreed rates. It can also be negotiated that the client can adjust the rates, such as when the income changes.

How much money do I have to raise myself?

Financial experts see equity of 20 to 30 percent of the house price as a solid base. For their offered top interest rates, however, banks often want to see 40 percent equity. Some banks are also willing to finance the full purchase price. But they often demand hefty risk premiums on interest.

Is there money from the state?

The State Development Bank KfW offers loans, for example, for the purchase of owner-occupied residential property, energy-efficient construction and renovation or for age-appropriate living. In addition, the state pays the housing premium of 8.8 percent in building society savings. Repayment installments of loans can be deducted in part from the tax. There is also state support in the form of the so-called residential Riester for the purchase of self-used real estate for retirement.

What happens if I become unemployed or incapacitated for work?

Risks such as these can be fully or partially covered by various insurance policies. Thus, there are insurance against occupational disability, unemployment, life insurance or residual debt insurance, each covering different vicissitudes. Consumers should seek good insurance cover before concluding a policy and a home loan.

 

Categories