Real estate loan – what can i afford?

Construction financing: very few are able to finance real estate with an existing cash capital. Therefore, a real estate loan is important for the purchase or construction of property. Buyers are not always sure what they can and should afford to pay. How much equity is necessary? For which real estate purchases are offered loans? We have all the important information on the subject in the overview.

What is a real estate loan?

In the case of a real estate loan, it is a loan for a specific purpose. This means that the capital provided serves a specific purpose. In this case, the purchase or even the renovation of any type of housing. The loan can cover all or part of the costs of the upcoming project. So it is possible to combine the loan with equity or subsidies. It is advisable to handle real estate loans through independent financing specialists. Suitable offers can be discovered for example at Optifin. The portal provides access to a wide range of services related to real estate loans:

Who gets a real estate loan?

Anyone planning to buy real estate or build a home can apply for a loan. In what form this will be realized depends on various points:

1. Equity
2. Financing amount
3. Collateral
4. Existing loans
5. Age

It pays to know your financial options right from the start. If you can see your financial scope, you will find the right property faster.

At what level can you get a real estate loan?

A real estate loan is suitable to realize projects in all price ranges. A redevelopment for 25.000 euros can be covered by a loan just as much as building a house or buying a house for 500.000 euros. Which loan amount is approved must be determined individually for each application.

When buying real estate, there are costs for the purchase of the property and a number of ancillary costs. These are composed, for example, of notary fees or renovation costs. Incidental costs are often in the range of 10 – 15% of the purchase price. Ideally, this sum is available as equity. However, since this is not always a given, it is also possible to cover the entire purchase with the ancillary costs through 100% financing.

The amount of the monthly installments is calculated from the loan amount, the interest rate, the term and the amortization. The actual rate should not exceed about one third of the total income. Exceptions make here persons and households with a very high income.

Do you have to process a real estate loan through the house bank?

It is not necessary to run loans through the house bank. It is even worth looking at offers from several banks and compare them. Working with the house bank has the advantage that here the financial circumstances are already known and a loan application can be processed quickly. It is not uncommon to be able to secure very good terms as a long-term customer. Still, it's a good idea to contact other banks to secure the best deal as well.

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