As soon as the fixed-interest period has expired, in most cases real estate owners need a follow-up financing. In this respect, the right time should be chosen in order to save money.
Prolongation, debt restructuring or a forward loan? There are several possibilities for arranging your follow-up financing.
Follow-up financing, what does that mean?
Should the fixed-interest period be expired, you require a follow-up financing to repay the outstanding debts. Usually three month before this period ends, the house bank will make you an offer with regard to continued financing. Obtaining offers from other suppliers is almost always worth doing.
If the general level of interest rate has risen, since the conclusion of your first loan contract, there is the risk that the future monthly charge could be significantly higher. By using a forward loan, you can secure the current interest rate level regarding your follow-up financing, namely already 36 month before.
The loan granting house bank is obliged by law to submit a proposal for following-up financing, three month before the fixed-interest period will be expired. If you don´t like the offer, you still have time to gather counteroffers, although there could be time pressure. We therefore advise you to deal with this topic several month in advance. In this case, it would be good if you come to us in time, so that we can discuss calmly your desires and ideas regarding your follow-up financing. And besides that we will review offers from other banks. As you can see, efforts will pay off.
As already mentioned, there is the alternative option of concluding a forward loan agreement, 36 month in advance. Of course, it depends on the interest rate development and on the current yield curve, whether this is advisable. Therefore, please don´t forget to take a look at the current conditions, approximately three years before the fixed-interest period will be expired. The team of FinanzierungsExpert would be glad to carry out those relevant inquiries for you.
The structure of the second investment round does not differ fundamentally from the first financing round. However, all conditions should be renegotiated in order to adjust the new financing optimally to your current situation: Your personal living conditions not only have changed most likely, since the first loan has been concluded – due to a better-paid job or due to addition to the family. Even the general level of construction interest rates has increased or at best has dropped, since the first loan undertaking.
An individual consultation appointment can be arranged by contacting us:
Phone: 0721 – 56 42 42
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Information about the author:
Alexandra Schneider is a certified bank business administrator and she writes about up-to-date topics, for FinanzierungsExpert.