If you are thinking of buying or building a property, you are also thinking about financing. This is usually done through a real estate loan, also known as a home or house loan. This form of credit is designed for a long term and usually also results in a hedge through an entry in the land register. But what actually happens when the property has already been paid for and there are major renovations?
These can also be very expensive and often cannot be realized without a loan. However, this is not a real estate loan, but a residential loan. This special form of credit has been devised precisely for these cases. The conditions differ from those of the house loan and a land register entry is also not provided here.
Loan amount and term are significantly shorter
A home loan is intended to help property owners to carry out necessary work on their own house. In contrast to a real estate loan, the interest rates are somewhat higher here, but there are no other costs. Since no entry in the land register is required, the fees due for this are also not payable.
Furthermore, it is not necessary to deal with the matter through a notary. These costs, which are not insignificant, are therefore saved with a home loan. However, there are a few things to consider when applying for a home loan. The approval is thus based on a number of conditions that are not all that different from those of other loans.
The borrower must first be of legal age and have a sufficient regular income. In addition, it is imperative that the borrower have a permanent residence in Germany. If you want to take advantage of the special benefits of a home loan, you must also prove that you own a property for which the loan is ultimately to be used.
Find the right decision with a comparison
There are various options for homeowners when looking for the right home loan. In this regard, he can simply go to his house bank and get intensive advice on this topic. However, this advice is then only focused on the bank’s product and the borrower lacks the comparative offers.
However, there is the possibility to compare residential loans from different providers on the Internet. For this purpose, different comparison portals are available to the homeowner. Here the different conditions of the individual providers are compared and you get an overview of the housing loans from different providers.
First of all, attention should be paid to where the decisive differences can be found. It may well be that the borrower does not have to specify a purpose if he has proven his property ownership. The home loan could also be used for other things that are not related to the property.
Compare, decide and conclude a contract
A few principles should also be observed when using comparison portals on the Internet. So it is imperative that you always use several comparison portals so that you get a really meaningful result. Since there is no portal that really compares all providers with one another, no portal alone can provide an overview.
As a rule, the biggest competitors on these portals avoid each other in order not to do badly in a comparison. So it is inevitable to compare the results of several comparison portals. With the offers, you should also pay attention to whether the residential loan is equipped with additional services. This can be not only special repayments but also a break in installments.
With such little extras, the housing loan can be provided with flexible planning. This naturally gives the borrowers a lot of leeway, which enables them to react accordingly in special situations. For this reason too, a home loan is a clever alternative for homeowners that should not go unused.