Home loan comparison: Discover top conditions now

Important to the house loan

  • “Home loan” is another name for the construction or real estate financing.
  • Thanks to very low interest rates, construction loans are currently very cheap.
  • To get a home loan, you need equity or other collateral.
  • In the case of mortgage lending, own contribution can also be counted as equity.
  • Borrowers should pay attention to fixed interest and APR in the home loan.

Lending rates have been at their lowest for years. Rarely has it been so cheap for borrowers to finance a home. Here you will learn everything important and receive practical tips on the home loan. It is also advisable to use a credit comparison to find the most suitable loan.

requirements

Despite favorable loan interest rates, borrowers have to meet some requirements for the bank to agree to a home loan. The following questions will help you to determine if you meet the requirements for lending:

  • Do I have a safe and regular income? This question is important, because the bank wants to make sure that you can pay off the installment loan rates in the future as well. Salary requests are required for applying for the loan, which you must also deliver. The self-employed usually have a little more difficulty because they usually have to prove that they have sufficient income through the tax assessments of the past three years.
  • Can I raise sufficient equity? The amount of the financing requirement and thus also the duration and the amount of installments depend on the amount of equity contributed. It is recommended to raise between 20 and 30 percent equity for real estate financing. There is also the possibility of a full financing without equity. However, the interest rates of these loans are higher, so that the total borrowing costs and the rates rise.
  • Am I insured if I can not pay the installments? To secure a real estate loan, most borrowers take out term life insurance or other insurance. They bear the due credit installments when a borrower can no longer work or dies during the financing. As a rule, you can also take out insurance to cover the home loan after the financing. However, some banks require appropriate insurance as collateral.
  • Can I finance together with my partner? For all financings, it usually applies that multiple borrowers offer better opportunities. Therefore, check whether you can finance together.
  • Are my financial circumstances organized? Real estate financing is a long-term investment. Here, your financial situation depends on continuity. In order not to get into financial difficulties, you should also have a small cushion. If banks find irregularities in their finances, the approval of the home loan is in the balance.
  • Do I have a good credit rating? Even if the bank usually as security a mortgage can enter your credit rating is important for a Hauskredit.Sorgen your best well before borrowing that increases your credit rating and so your improve creditworthiness. For example, pay off maturing loans faster or avoid overdraft facilities.
  • Can I provide additional security beyond my income? You increase the chances of lower interest rates and mortgage lending if you have additional collateral, such as real estate or life insurance.

Good to know

Instead of the term “home loan”, the terms real estate financing, construction loan, mortgage lending or real estate loan are used. Thus, the home loan can be used both for the construction of a house as well as for the purchase of a home.

Find the suitable home loan

Find the suitable home loan

If you are looking for a suitable home loan, you should first determine your financing needs. It results from the difference between the total cost of your property and the equity capital raised. In addition, take into account in the financing that additional costs when buying a real estate come to you. These include, for example, the property tax, notary fees or possible development costs if you build building land.

Check required collateral

For all credit offers, check which collateral is required. Match the collateral you need with the collateral you have. So you can sort out inappropriate offers or providers immediately.

Check funding options

A home loan is not equal to a home loan. For the financing of real estate banks usually offer you various credit models. Here are the five common loan types for home loans:

  • Annuity loans: For this type of loan, a fixed interest period is initially agreed. You then pay the same installments for this period. Each installment consists of an interest and an amortization section. At the beginning of the repayment, the interest portion is significantly higher than the repayment portion. The annuity loan has the advantage that you pay off the same amount every month.
  • Redemption Loans : Redemption loans are generally loans in which the loan amount is repaid in equal installments. Another term for the repayment loan is annuity loan. Repayment and annuity loans are the most widely used forms of home loan financing.
  • Term loans: With this form of credit, you only pay the interest during the term. The remaining debt will only be redeemed on the agreed date at the end of the term. The term loan is also referred to as a repayment-free loan. Often, the term loan is combined with a life insurance policy, whose payout date is linked to the repayment date of the loan. Another option is to use the bullet loan with home savings contracts. Due to the lost tax benefits in the case of endowment life insurance policies, the term loan is now rarely used for home financing. However, this form of loan is conceivable, if you can count on a fixed time with a high capital distribution.
  • Foreign currency financing : In such financing, the home loan is taken in a foreign currency that offers a favorable exchange rate. Thus, the overall financing for the borrower can be cheaper. However, the credit costs are ultimately dependent on exchange rates. If these develop unfavorably, it can lead to dearth of the home loan.
  • Forward Loans: In a forward loan, you agree with the bank on an interest rate on the loan that you will take at a specified time in the future. Such a loan is often used for follow-up financing to secure favorable interest rates. However, you must expect interest premiums on this home loan.

You should pay attention to this with your home loan

With a home loan, you are usually tied to a lender for at least ten years. So long is usually the fixed interest period. Therefore, you should consider the following aspects before closing the loan:

  • Fixed interest: With the fixed interest, the loan interest is fixed for a fixed period. It is advisable to aim at the lowest possible interest rate for low interest rates. If the lending rates are very high and you expect a reduction, you can choose a short fixed interest rate.
  • Term: The longer the term, the higher the total credit costs and the smaller the monthly installments. Here it is important to determine with the help of a household calculator, which rates you can pay monthly, without you get into financial distress.
  • Monthly rates: The higher the monthly installments, the faster you can repay your loan. Note that you can regularly pay monthly installments over a longer period of time.
  • Equity: A verifiable equity of 20 to 30 percent of the purchase price is optimal for a home loan. The higher your equity ratio, the cheaper interest rates will be and the faster you have paid off your loan.
  • Special repayments: Make sure you can make free special repayments. In this way, you can either lower the monthly installments or shorten the runtime.

Use credit calculator

For home loans, which are usually more than 200,000 euros, even small changes in the APR can bring several thousand euros in savings in total credit costs. Therefore, use a credit calculator on the Internet before the loan conversation with the bank to obtain suitable offers for a home loan.

Step by step to the home loan

Step by step to the home loan

Inform yourself about everything important in advance

  1. The better you are informed about possible loan types or repayment modalities as well as fixed interest rates, the better for you. Take advantage of the diverse range of information on Financedel to find out about important terms in financing or peculiarities of mortgage lending.

Exact investigation of one’s own financial situation

At this point, honesty is needed. Together with your partner, discuss your financial options. The more accurate you calculate, the more solid your financing will be. Always include a buffer for unforeseen issues.

Plan your eradication long term

Bear in mind that the repayment of the home loan not only fits in with your current life situation, but should also be possible in the future without any problems.

Put on good advice from experts

A home loan is usually a complex matter, which is very difficult for laymen to see through, at least in the beginning. Use the advice of experts and get independent offers. By comparing the offers and different opinions you can easily find the best credit product for your property.

Use of a loan calculator

Using a loan calculator, you can quickly and easily get initial clues about the cost of the loan. Another advantage is that you can compare the same number of different providers with just one computer.

Decision for a loan

Should it be an annuity loan or a term loan? Are there also possible combinations? Choose the type of loan that best suits your financial circumstances.

Possibly conclude a home savings contract

Depending on the type of loan you have decided on, it may be advantageous to conclude a home savings contract. Check your options here as well.

Compilation of relevant documents

For a home loan, you usually need various documents. Collect, for example, in advance, salary or proof of possible collateral such as insurance policies and land register entry.

Demand concrete offer

Once you have all the key data for your home loan, you can get specific offers from banks. This usually requires an on-site appointment. Compare all offers and take your time. After all, you finance your home for many years.

Completing the home loan

Complete the loan with the bank that made you the best deal.

House loan for new building

If you use your home loan for a new building, you should definitely have the construction costs in mind.