In times of low interest rates and the associated cheap loans, many households plan to build their own home or buy property for residential purposes. These considerations have a practical background because rents are rising continuously. With affordable building finance, the dream of owning a home is within reach for many people.
The advantages of home ownership
In addition to the independence that a home offers, there are a number of other advantages. A property is largely protected against inflation risks and very stable in value. Much of a household’s monthly budget has to be paid for rent. If the house loan is paid off in old age, the costs for the rent no longer apply and a higher amount is available for other expenses per month. Families with children also enjoy tax benefits if they finance their own home. Before concluding a loan agreement to finance a residential property, a thorough analysis of the personal, financial situation should be carried out. The possibility of a substantial funding should be checked and the costs must be calculated in advance.
Find cheap financing
The low interest rate policy of the central banks has resulted in the financing of residential property being offered on very favorable terms. However, it is not advisable to accept the first offer from a bank immediately. It is more helpful to invest some time and make a comprehensive comparison of individual offers. Internet portals with corresponding comparison computers are a useful help. Here, the offers for mortgage lending from banks and savings banks are bundled and made available to visitors to the portal. Offers from building societies and possible funding are often taken into account in this comparison. Interest overviews provide an overview of the current interest rates and it is often possible to have a repayment plan drawn up. In addition, the visitor to the portal receives an indication of the fixed interest periods, which play an important role in the planning of personal financial needs.
Correct calculation and obligations as owner
Building finance is a very complex matter. Many special features have to be taken into account. The personal contribution has a major influence on the amount of the loan. Here the offers of the credit institutions differ in part considerably. A 25-30% share of the loan is considered realistic. If the own contribution falls significantly below this percentage, a higher loan must be applied for, which further reduces the household budget. It must be taken into account that there must be financial means for incidental costs and special expenses.
Furthermore, changes in the income situation should be included in the calculation. Building finance means a long financial commitment with the corresponding payment obligations. The purchase or construction of residential property involves obligations that differ fundamentally from those of a tenant. Instant maintenance costs must be borne by the owner and insurance to protect the building must be taken out. Local decisions, such as road renovation, can mean additional financial expense. The authorities often pass the costs of such measures on to the neighboring homeowners.