Construction financing in times of COVID-19

Due to the current situation a lot of us are concerned and confused. Concerning this mattter, we would like to confirm: Continously, even at times of Corona pandemic we will remain at your side, however in slightly modified form. At any time, the team of FinanzierungsExpert provides you with an extensive consultation, regarding your future projects including the requests about your ongoing construction project.

In order to comply with the required rules of behaviour for the protection of all persons, we will give expert advice by phone, via Skype, Zoom and Facetime or by other media, until further notice. Now, you can submit all your documents in digital form. Afterwards we will pass them to the responsible bank, to make sure possible agreed payment deadlines are met. Furthermore, we gladly adivse you in general terms, when you are still looking for the right property and you want to to get informations about the processing and the different financing solutions.

At present, should you have a need for credit, you don´t have to worry about the fact that some banking institutions have stopped temporarily their branch business service. Most banks we are working with are characterized by highly efficiency. That is why loan applications can completely be handled in digital form. Also in the current situation the FinanzierungsExpert team will find for you the right financing solution and is going to manage everything without any physical contact.

In case of income loss, what should be done when the interest rate can´t be paid back?

Banks are perfectly aware, that liquidity difficulties will increase over the following weeks. In order to assist you properly in those challenging times and to take care of your problems, namely paying off your well-deserved homestead, several of our banking partners offer the following solutions:

Suspension of repayment:

What does that mean? The monthly loan repayment will be suspended for a specific period. During this time, merely your monthly loan interest shall be incurred. Often, this kind of option is already regulated by the loan agreement. In addition, there are some banking institutes which are currently willing to find individual financial solutions for you.

Deferral of loan repayment:

Deferral ol loan repayment means that the complete amount of annuity (interest rate and redemption) shall be suspended. The remaining rate will be attached to the original maturity date.

Change of repayment rate:

In case you have agreed on a higher repayment rate with the option of changing the rate by contract, you can now reduce your redemption in an easy way. Most banks offer a minimum rate of repayment by around 1%. Please note, by reducing the repayment rate the initial loan duration will be extended. Furthermore, in many cases you can only once change the repayment rate within the fixed-interest period. Should you increase repayment after the crisis, it cannot be ruled out, that the further process depends on your bank´s goodwill.

Please bear in mind, banks respond differently to the corona crisis, and the provided options differ from bank to bank.

Should you experience a period of financial difficulties, you should take immediate action. Please contact your bank or us. At any time, we are glady available by phone. And we will do everything possible to find the right solution for you.

We wish you and your family to stay healthy and that you will soon emerge from this crisis without any damage.

 

Do you have any more questions?

An individual consultation appointment can be arranged by contacting us:

Phone: 0721 – 56 42 42
E-Mail: info@FinanzierungsExpert.de or just use our information contact form provided on this website.

Information about the author:

Alexandra Schneider is a certified bank business administrator and she writes about up-to-date topics, for FinanzierungsExpert.

 

 

Real estate – a highly competitive market

The search for a dream property is anything but an easy task, at the moment. Especially in big cities property prices have gone up significantly. And if you take part in an openly accessible property visit, you will quickly realize that you are not the only potential customer. As soon as 30 interested persons have submitted their application, 29 of them will come away empty-handed. Aquiring your own four walls could turn out to be a difficult and rocky road.

With this article I would like to give you some good tips, which will help you in your search for property. By following this advice, you are going to convince some of these salespersons or estate agents about yourself.

Preparation

Internet is the very first contact point. Day after day, on various portals you can see property advertisements. In addition to these offers, you have the possibility to enter your search criteria and requests on these platforms. By doing this, you will be informed immediately, as soon as a new property is posted online which meets your requirements. This process of beeing informed is extremely important. Just remember, as it is often the case: You have called the estate agent or the salesman, and the responsible person told you straight away that the property in question has been already sold. At a time when potential buyers purchase real estates without inspecting them, time is a crucial factor.

A lot of properties do not officially come onto the market, but are sold underhand through relations and contacts. So it is best, if you use social contacts and media. For example, talk to your collegues, hang up some flyers at your fitness studio and post your request on Facebook, Instagram and on other social media platforms.

As soon as you have found the right property, you have to overcome further obstacles. That´s why, act quickly! Contact the estate agent or salesperson via mail right away, or additionally call the responsible person. You have to bear in mind: You will not be the only prospective customer. Quite often it has been the case, that the advertisement has been withdrawn and deactivated right after its publication, due to an extreme amount of requests.

Keep at it!

If you managed to get an appointment for viewing, please do not forget to bring a written financing confirmation with you. This indicates to the estate agent or salesperson an uncomplicated sales processing. And it also proves, you have not only just been interested in purchasing property since yesterday; on the contrary, you have dealt intensively with this issue.

The team of FinanzierungsExpert will provide you with advice and assistance in procuring a written confirmation. Should you indeed receive the acceptance for the desired property, it has to go quickly. In some cases, for example, the responsible salesperson needs the sale proceeds for requiring new property. Should all necessary documents have already been submitted to our financing experts, the follow-up processing will go much faster.

These two things, having a financing confirmation and leaving a good impression, are the determining factors. As similar to a job interview you should previously prepare appropriate questions, you whish to ask the property agent or the salesperson. Any person showing a great deal of interest in the property concerned, will make a much better impression. Not only figures and facts play an important role, but also sympathy; especially among private salepersons, who want to make sure, the estate will be in good hands.

Keep at it!

Of course, the tips listed above cannot guarantee full success. You could be as well-prepared as you like, but you finally won´t be selected for getting the desired property, because of the high number of applicants. So if there is no success, after searching for months, you should perhaps reconsider your criteria regarding property. In some cases, it is absolutely sufficient to do without a bathtub or balcony. Under any circumstances, stay continuously in touch with your estate agent and keep your eyes open and ears tuned.

The FinanzierungsExpert team – your strong and reliable partner – whishes you a lot of success  when it comes to construction financing.

 

Do you have any more questions?

An individual consultation appointment can be arranged by contacting us:

Phone: 0721 – 56 42 42
E-Mail: info@FinanzierungsExpert.de or just use our information contact form provided on this website.

Information about the author:

Alexandra Schneider is a certified bank business administrator and she writes about up-to-date topics, for FinanzierungsExpert.

 

Climate protection is rewarded

In the past, it has already been possible to attain a loan with especially attractive conditions through the KfW Bank. Thanks to the climate protection package of the German goverment, from 2020 onwards, the KfW Bank will be even more interesting for customers with regard to new building projects and renovation projects. The climate protection programme aims at rewarding those who build a house or renovate eco-friendly. As from 24.01.2020, those eco-friendly orientated clients can choose from the KfW programme 151 renovation loans and 153 efficient construction loans. And in doing so, they can ensure up to 120.000 Euro per apartment or house, based on current conditions of 0,95 percent.

Fixed interest rates can be set up to ten years. The repayment will be adapted appropriately, so that the maximum term of the loan is thirty years. The KfW´s financing components are very popular primarily among constructors, who want to bring in little equitty capital regarding financing.

Traditional financial models are designed in this way, so that interest rate is independent from loan-to-value ratio of the real estate. That is to say, the more you bring equity capital into financing and thereby reduce the default risk for the bank, the better the offered conditions will be. Does a customer provide lots of capital resources to his project, the bank may grant such a benefiting interest rate, which finally exceeds the conditions provided by the KfW. 

Does the client choose total or partial financing by the KfW Bank, he or she doesn´t have to be afraid of any bureaucratic burden. Receiving a promoted loan is as simple as that, because KfW loans are applied directly at the bank and are carried out their. Since most clients carry out only a small part of their financing project through the KfW Bank and therefore need an other bank loan to cover the remaining capital requirements, the selected bank will handle the whole KfW proceeding. Should the borrower get into payment difficulties, the relevant bank will bear the liabilty  towards the KfW Bank. In return, the bank will receive a compensation by the KfW, and the total outstanding credit (KfW credit plus bank loan) will be secured by land register.

Let us take an example: After deduction of capital resources the client needs furthermore 300.000,00 Euro for buying a new single-family house. Therefore he receives a credit amount of 120.000,00 Euro by the KfW Bank. The remaining 180.000,00 Euro will be financed by a bank loan of the responsible institute. In favour of this banking institution, a land charge of 300.000,00 Euro will be recorded in the land register, at the relevant department. 

In that case, the bank takes care of the whole paperwork (certificate of the land charge/ agreements/application to the KfW Bank). There remains an important task for clients. So that the bank is able to apply for a KfW credit, the client has to consult a energy advisor recognized by the KfW, before doing renovation or building a new construction. Towards the KfW, the responsible consultant has to confirm compliance with the constructional conditions.

Speaking of the KfW interest rate, there is another benefit: Attractive repayment grants, who are granted for programme No. 151 and No. 153. Since 24. January 2020, the repayment bonus for programme No. 151 is 30.000,00 up to a maximum of 48.000 Euro. With regard to programme No. 153, the promotion is at least 18.000,00 Euro up to the maximum amount of 30.000.00 Euro. This is anything but a small sum of money. The amount of subsidy depends on the following: to which extend is the renovation or the new construction more energy-efficient than a standard property. Especially with renovation projects, the promotion with 48.000,00 Euro could turn out to be very abundant.

This, coupled with a very beneficial interest rate, could lead at best, that the client is provided with a minus interest rate of 6,8%, in real terms.

 

Do you have any more questions?

An individual consultation appointment can be arranged by contacting us:

Phone: 0721 – 56 42 42
E-Mail: info@FinanzierungsExpert.de or just use our information contact form provided on this website.

Information about the author:

Alexandra Schneider is a certified bank business administrator and she writes about up-to-date topics, for FinanzierungsExpert.

Everything you need to know about the building permit

The building permit is a specific document, issued by the building supervisory authority. It proves that a new construction or a rebuild does not violate public law regulations. Having in mind, that every federal province hat its own regulation about the location of construction, you should previously obtain informations from the responsible building supervisory authority.

In that respect, the building permit is the basic requirement for starting your new construction or reconstruction project. In order to get a building permit, those who are entitled to perform on construction projects, such as architects/civil engineers or supplier of prefabricated houses, have to submit the building application.

The necessary papers could be different in each federal province, so you have to look into its construction regulations. The following documents are always absolutely essential: Site plan (at a scale of 1:500), construction drawings (at a scale of 1:1000), informations about generating water supply and water disposal, specifications about statistics, heat insulation and noise protection, calculations on the built-up property area and the undeveloped part, evaluations on the total floor area/the surface area and on the living space/effective area. Furthermore, a listing of shell construction costs and of total expenses as well as a data entry form about construction activities are to hand in. Finally, you have to collect signatures from the owners of the neigbouring properties. They cannot stop the building permit. However these property owners have the option to file a suit against your construction permit, at the administrative court. That´s why it is recommended to obtain their consent.

The above mentioned documents, along with the building application, have to be submitted at the municipality. Afterwards, the corresponding body will turn the building application over to the building supervisory authority. Within ten working days, this authority has the obligation to check, if the application is complete. In case of incomplete data, the applicant will be granted a period of time in which he can hand in the concerning papers. Should the applicant not meet the deadline, the request will be rejected. At best within ten working days, you receive a confirmation about the complete proposal, including the date on wich the request will be decided.

From the date of receipt, the building permit is valid for three years. Please note, that this permission has to be shown at the building site, when there is an inspection. Otherwise the responsible supervisor will set a time limit of three days for submitting the missing building permit. At worst, he could issue an order to stop the whole building project. In the light of the above, construction work can only take place, when you hold this essential permit in your hands. Otherwise, there is the threat of fines or the building site could even be demolished completely, because a building permit cannot be granted afterwards.

Additional requirements concerning the construction project:

Two weeks before finishing the shell of buildung, the building supervisory authority is to be contacted, so that those responsible take appropriate measures for the acceptance of the construction site. Apart from this, you have to inform the building authority, two weeks before completing the whole construction. In addition, on the day of acceptance you must show a confirmation paper about the safe usability of the exhaust system, issued by the chimney sweeper. 

If your construction differs substantially from the development plan, from town charter or rather from building regulations, a request is to be made. Generally, this kind of application is very difficult  and can only be approved, as long as there is no harm to public interest.

Do you have any more questions?

An individual consultation appointment can be arranged by contacting us:

Phone: 0721 – 56 42 42
E-Mail: info@FinanzierungsExpert.de or just use our information contact form provided on this website.

Information about the author:

Alexandra Schneider is a certified bank business administrator and she writes about up-to-date topics, for FinanzierungsExpert.

 

Construction financing without equity capital – how should this be done?

As with so many things in life, sometimes the unexpected happens!

You are not really looking for real estate. And honestly speaking, very shortly after beeing graduated, recently starting a job and having a lack of equity capital this kind of project does not fit with your current stage of life. But then, as luck would have it, you have spotted your dream property, or you have access to real estate on favourable terms which you find very appealing for a long time.

To keep a long story short: You have to seize the opportunity!

But how does that work if your parents can´t support you with money and you also can´t provide property as a additional security?

In fact, it is perfectly realistic to carry out a complete financing together with incidental extra expenses. Besides the selling price, in case of aquisition land transfer tax, notary fees, land registry costs and in certain cases broker´s commissions have to be paid, which amount to approx. 10% – 15% of the total purchase price. As a result, the overall expenses will increase enormously.

By providing a full funding, banks take therefore a high risk because the additional purchase costs don´t have an equivalent value, and finally, they are regarded as a credit in blank. The one condition for such granting loans is a very high credit rating which is reflected in a high and sustainable income, in not having any negative credit events at the Schufa (credit investigation company) and in a property which is well located and in good condition.

Even if all those criteria are fulfilled, there a still a lot of banks which do not offer full funding because of business policy and which demand the contribution of additional purchase costs.

In such cases, there is the possibility of splitting the funding. The selling price of the property will be  funded through the desired bank, and besides, the additional purchase costs will be financed through a so-called subordinated loan provided by a specialised bank. Since the security of the loan is subordinated, as its name already suggests, the relevant bank has to bear a particularly serious risk. According to this, the bank will set a high interest rate. However, there is one benefit: Most of these credits can be replaced prematurely at any time, without any early repayment charges. This means that you enjoy a certain flexibility. At all times, you can completely repay the loan or you can use monthly liquid funds as special repayment, in order to reduce the expensive credit component as quickly as possible.

As you can see, this kind of financing allows customers, with a monthly liquidity but yet a lack of capital accumulation, the possibility to aquire soon enough their own dream property – despite insufficient equity capital.

 

Do you have any more questions?

An individual consultation appointment can be arranged by contacting us:

Phone: 0721 – 56 42 42
E-Mail: info@FinanzierungsExpert.de or just use our information contact form provided on this website.

Information about the author:

Alexandra Schneider is a certified bank business administrator and she writes about up-to-date topics, for FinanzierungsExpert.

 

 

Child benefit for building – Questions and Answers

By law enactment, child benefit for building – a government grant scheme to support families building homes – was introduced, on 05 July 2018. It aims to support young families to create their own homes, by supplying cash subsidies.

Does every family obtain child benefit for building?

Not at all, child benefit for building is attached to special conditions.

Under what conditions does a family receive child benefit for building?

Families with at least one child, being under 18 years of age and living in the same household, who have an annual taxable income of maximum 75.000,00 Euro plus 15.000,00 Euro per child, are eligible for this kind of child benefit.The subsidy amounts to 1.200 Euro, per child and per day, and is granted for the period of ten years.

For a better understanding: Each family with one child is allowed to have a maximum annual taxable income of 90.000 Euro and obtains a subsidy of 12.000,00 Euro, in total. In case of a family with two children, there is a maximum tax revenue of 105.000.00 Euro, and the total grant amounts to 24.000,00 Euro.

Apart from these financial conditions, two more criteria are to be met: The applicant aquires property for his own use, and besides, he does not own any further real estate assets. Child benefit for building is not a credit, but a subsidy, applied for through the KfW Bank.

When will the construction child benefit be paid out?

Child benefit for building is paid out in annual instalments. After a positive review of the supporting documents by the KfW Bank, the first grant instalment shall be transferred to the applicant´s account. You will find the specific date of payment on the confirmation paper which you have previously received from the KfW Bank. The further grant instalments will be remitted in the following nine years, always in the same month of the first payout.

Can you apply for construction child benefit retroactively?

Yes, indeed. Construction child benefit can be applied for retroactively, from 1st January 2018 on. That means, when you build or buy a house, in 2018 or later, you can submit your application. At the latest within six month after moving into residential property, you can make a request.

 

Do you have any more questions?

An individual consultation appointment can be arranged by contacting us:

Phone: 0721 – 56 42 42
E-Mail: info@FinanzierungsExpert.de or just use our information contact form provided on this website.

Information about the author:

Alexandra Schneider is a certified bank business administrator and she writes about up-to-date topics, for FinanzierungsExpert.

 

Variable property financing – as a clever move

As a person who wants to acquire a new home, you have two options: Either you purchase an existing property (buying a plot of land and a building) or you buy a new real estate. In case of  new construction, there are as well two opportunities: the purchase from the property developer, as part of an „all inclusive package“, or the aquisition of real estate and the subsequent construction, as two separate procedures. Often, the opportunity comes up by chance or very spontaneously. For the invester the location is the most important factor, and in case of a suitable building site you should act quickly. There may be some time between land purchase and building development. Those, who do not have enough funds to finance the property with their own resources, will need a financing at that time. The remaining topics will explain which variants are available for this and what kind of risks and opportunities arise through this.

Financing through an annuity loan

An option would be funding with a loan, through an annuity loan with a fixed-interest period  chosen by you. This kind of credit stands out by its good conditions and it also offers the advantage of securing the interest rate, in the long term.

Dependence

However, the above mentioned method of financing contains a critical issue. You may find yourself unintentionally in a dependence. How does this happen? The bank, as the financing institute, has primarily recorded a land charge in the land registry. And the loan which is needed for the property construction has to be secured by a secondary mortgage. This so-called subordinated financing is more risky for the second bank, because in case of insolvency this banking institute is not entitled to receive priority security. That is why every bank will demand compensations for taking that kind of risk, by charging higher rates. In an insolvency situation, the bank which is in charge with real estate financing shall also have the primary right to be paid out. Furthermore, this bank is aware of the fact that in terms of development financing the other banks won´t offer very good conditions. This means, the relevant bank will also charge a higher rate without turning a hair, in order to acheive a better margin. How should this dilemma be resolved?

Variable loan – at first pricey, but in the long run more benefical

In case of an ordinary loan, you depend on the bank which finances your property, because it is secured primarily and it has a fixed-interest rate term. The solution for dealing with this kind of problem is to carry out interim financing, in form of a variable loan. With a variable loan there is no interest fixing. That is to say, the variable rate will be reviewed every three month, and it will automatically adapt itself to the current interest rate market. Your interest rate may thus change positively or negatively, every three month. The disadvantage is that you do not have planning security. And because of the included flexibility, the variable rate is more expensive. However, the main advantage is that the loan can be terminated with a period of four weeks, without beeing obliged to pay penalty interest. In practice this means the following: The second bank, which allows you a credit for construction, will increase the loan amount by the outstanding debt of the property financing. Also, it will replace the first bank. And in return, the primary land charge will be deleted or it will be assigned to the second bank.

On the whole, it means that the relevant bank is recorded in the land registry in the first place, and so it will give more beneficial rates as a reward.

By choosing a variable property financing, you are completely unbound and you can use this scope of negotiation for the benefit of a favourable interest rate, which would have been impossible with another bank.

 

Do you have any more questions?

An individual consultation appointment can be arranged by contacting us:

Phone: 0721 – 56 42 42
E-Mail: info@FinanzierungsExpert.de or just use our information contact form provided on this website.

Information about the author:

Alexandra Schneider is a certified bank business administrator and she writes about up-to-date topics, for FinanzierungsExpert.

 

The SCHUFA – speaking of construction financing, what should you keep in mind?

Whenever you would like to build a house or buy a property and you need a financing solution for this purpose, there is no way to avoid the following institution: The SCHUFA (a protective association for public credits) is a data collection point. Informations deriving from telecommunication agreements and from the trading and financing sector are recorded there. Most of these entries refer to instalment credits, real estate loans and to current accounts. Furthermore, negative issues such as arrest warrants or inability to pay are reported and registered there. In doing so, the SCHUFA does not verify that the stored records are correctly drawn up. Negative entries have an impact on the SCHUFA scores and they affect upcoming credit decisions or condition negotiations at the banks.

What exactly is the SCHUFA score?

The SCHUFA score is an internal credit score issued by this protective association for public credits, arising from the data of which it has been notified. That kind of score is expressed in percentage and it is supposed to assist loan providers on issues relating to creditworthiness. In case of a high score value, nothing speaks against awarding a loan from the SCHUFA´s perspective. In this context, it is important to be aware of the following facts: The existence of several registered current accounts or of listed loan condition requests has already a negative impact on the SCHUFA score. Therefore, please have in mind, that less is more. If you always serve the existing instalment credits on time, nothing stands in the way of a good score value. And if you are unsure, whether there could be negative entries at the SCHUFA, you will have the opportunity to make a free retrieval at the SCHUFA, once a year. Should negative facts been listed there, you will have the option of discussing openly this issue with your agent, and in doing so, you could explain how all this happened. In case of a financing application, the banks will regard such kind of openness as positive. You don´t need to worry at all that negative records could be saved forever and ever. For each negative entry at the SCHUFA, there is a specific deletion period. Once it has expired, the respective record will no longer be evident.

It makes absolutely sense doing a checkup at the SCHUFA, from time to time, in order to make sure that entries have been erased where required, and to act quickly in case of incorrect records. Should wrong informations be registered at the SCHUFA, you have the right to have it deleted immediately. This claim must be reported at the SCHUFA without delay, in written form along with the relevant documents.

 

Do you have any more questions?

An individual consultation appointment can be arranged by contacting us:

Phone: 0721 – 56 42 42
E-Mail: info@FinanzierungsExpert.de or just use our information contact form provided on this website.

Information about the author:

Alexandra Schneider is a certified bank business administrator and she writes about up-to-date topics, for FinanzierungsExpert.

 

 

Follow-up financing

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.

Do you have any more questions?

An individual consultation appointment can be arranged by contacting us:

Phone: 0721 – 56 42 42
E-Mail: info@FinanzierungsExpert.de or just use our information contact form provided on this website.

Information about the author:

Alexandra Schneider is a certified bank business administrator and she writes about up-to-date topics, for FinanzierungsExpert.

 

 

 

Paragraph 489 BGB (German Civil Code) – it may sound uninteresting? By no means!

Nowadays, fixed-interest rate periods with a term of 15-30 years are anything but individual cases. Needless to say, the more the amount of liability increases, the more expensive interest rates become. But at times of low interest rates, there could still be very attractive conditions. For customers who want planning security this might just be right for them. Nevertheless, is it really advisable to be bound to one interest rate for such a long time? In future, Is it possible that the interests will fall?

In this context, Paragraph 489 BGB (German Civil Code) comes into play:

There is no question that banks calculate the returns of the agreement concluded with the customer. Of course, they have the right to do this. However, after ten years have passed, clients are entitled, by the German Civil Code/paragraph 489, to cancel any loan agreement with a term longer than ten years, in whole or partially. This procedure is free of charge. Though a six-month period has to be met. This time limit of ten years starts the day, after your loan has been paid off in full. For example in case of financing a new building, loan will be paid out step by step, in line with the progress of the construction. Since the final instalment is due and your loan has totally been retrieved, on the day after the ten-year period, it is in force.

To what extend do you benefit from that? Effectively, you are bound by the loan agreement, only ten years and six month. As the case may be, you can restructure your debts by the use of a loan at more favourable conditions. In case the interest rates have risen, you can be pleased about that and in doing so, you can allow to continue the contract. Hower, should you have liquid resources in the meantime and you would like to use them for loan repayments, you can give a notice of termination in part, concerning this amount. Finally, you can use this sum as redemption.

As you can see, being up to date with legal issues, „being informed about paragraphs“, can be quite useful. Do you have any questions regarding this topic? Please feel free to contact our financing experts. They are really glad to assist you on this matter.

 

Do you have any more questions?

An individual consultation appointment can be arranged by contacting us:

Phone: 0721 – 56 42 42
E-Mail: info@FinanzierungsExpert.de or just use our information contact form provided on this website.

Information about the author:

Alexandra Schneider is a certified bank business administrator and she writes about up-to-date topics, for FinanzierungsExpert.