- What is a building loan?
- Differences to other forms of credit
- Conditions for the conclusion of a building loan
- What is meant by the allocation phase?
- What is meant by the loan phase and what should be considered?
- What are the advantages and disadvantages of a building society loan?
- What opportunities and risks exist with a home loan?
What is a building loan?
A building loan is a loan that is linked to a home savings contract . In which
Building loan is a special loan, which can be assigned to the customer, if certain conditions are met within the home savings contract. As a rule, the credit can be allocated if the owner of the home savings contract has paid 40 percent of the Bank sum into the Bank contract . As a result, he has the opportunity to pay out 100 percent of the Bank sum . Furthermore, a building loan is always earmarked and can only be used for specific projects.
Projects with which you can finance a building loan:
- The renovation, renovation, modernization or implementation of energy saving measures
- The land purchase
- A home purchase for persons without equity
- A home purchase
- Addition or conversion of existing property
Differences to other forms of credit
A home loan scheme differs from conventional and long-term forms of credit in many areas. For one, it is strongly earmarked and can not be arbitrarily used at leisure . A car purchase or the financing of a vacation are with a building loan
not possible. Furthermore, the Bank Credit, in conjunction with the Bank contract, divided into different phases . In the first phase, the customer pays money and receives interest on his credit. If the building loan has been allocated, the customer only pays interest on the sum resulting from the difference between the amount already paid in and the savings contract amount. An example:
Bank sum : 10,000 EUR
Amount already paid : 4,000 EUR
Assigned building loan : 10,000 EUR
The interest now to be paid would not be the full Bank sum of 10,000 euros, but only 6,000 euros, as the Banknehmer has already paid 4,000 euros in the home savings loan.
With a installment loan, the customer always pays interest on the complete loan amount. Furthermore, home savings loans have very good interest conditions, which are fixed and not variable . Special repayments are possible in both cases, depending on the terms of the contract. As a rule, at a building loan
always a special repayment possible.
Conditions for the conclusion of a building loan
If a customer concludes a Bank contract with a Bank Credit, this should be aware of the conditions attached to the loan . First of all, there are final fees for a Bank contract. These are on average between 1-1.5 percent of the home savings. So that can be up to 1,000 euros and more, if the borrower concludes a home savings contract in the amount of about 100,000 euros. The resulting fee is paid monthly at the rate in the building loan. This means that the customer only pays the first months to finance the closing fee. The monthly installment is set at the conclusion of a home savings contract and is not variable. Likewise, it is not possible to prematurely dissolve or pay off the Bank contract and the associated sum already saved in the event of financial bottlenecks. This is only possible with a termination of the Bank contract, partial payments can not be made. In the Bank phase is paid monthly in the building loan. The allocation can be made after a set time. In general, this is the case if the customer has paid 40 percent or more of the Bank sum in the Bank contract.
Bank sum : 10,000 EUR
Amount paid 40 percent of the Baussum sum, thus 4,000 EUR.
From now on it is possible to carry out the allocation and to pay out the remaining 60 percent of the Baussum sum together with the paid-in 40 percent. Accordingly, the total sum of 10,000 euros can be paid. However, there is no obligation to allocate the building loan.
To be considered factors of a home savings contract are therefore:
- acquisition fee
- Building loan can not be used variably
- No flexibility with financial bottlenecks
- Currently low interest on paid-in amounts
- Unflexible rates on loan allotment
- Allocation timing difficult to estimate
What is meant by the allocation phase?
There are several ways to reach the allocation phase. This may be contractually fixed with a certain period of time or a percentage deposit on the building savings.
- The Bank Credit loan can only be allocated if the Banker has paid at least 4 years in the Bank contract.
- The Banker must pay at least 40 percent of the total Bank sum in the Bank contract before the building loan is allocated.
If the contractual parameters are not met, the building savings loan is not allocated.
Once the allocation phase has been reached, the consumer has the option of lending the loan. If the money is needed before the allocation phase, alternatives should secure the financing. A reduction of the home savings would be a possibility, but would the building loan
Accordingly, lower, since the accumulated Baussum sum is lower.
What is meant by the loan phase and what should be considered?
In the loan phase, the complete Bank sum is paid to the Bank. It should be noted that now use the monthly installments and the associated fixed interest rate . The monthly installments are fixed and can not be varied. Furthermore, they increase slightly over time, until the difference between the amount paid in and the amount of the building savings has been reached and repaid . The amount of interest payable depends on the economic situation of each bank. Thanks to the current low interest rates, these are low and are normally less than 2 percent. If the repayment rates are too high, there is still the possibility of special repayment .
What are the advantages and disadvantages of a building society loan?
A home savings loan can be combined with state subsidies, such as capital performance . As a result, the Bank sum is reached faster and the consumer can get the building credit rather assign. The loan interest is contracted and, thanks to the current economic situation, this results in very low interest rates. Special repayments are usually possible and a home savings contract is very transparent. The deposit options are very flexible and it requires only low collateral to get a home savings contract.
One drawback is that clients with building society savings contracts are inflexible and subject to terms and conditions until credit release . There are additional costs when concluding the contract and during the Bank phase, there is no possibility, except the contract termination, to get at the already saved funds. Furthermore, the Bank Credit is earmarked and can not be freely used for financing of any kind.
- State funding
- As a rule, low debit interest
- Interest on deposited credit
- Special repayment mostly possible
- Low collateral necessary
- Building societies are safe thanks to deposit insurance
- Transparent overall model
- acquisition fee
- Unusable for saving due to low interest rates
- Long-term bond
- Paid-up sum in the savings phase unreachable
- Allocation point difficult to predict
What opportunities and risks exist with a home loan?
With a building loan, the borrower binds for many years, which one should be aware. The terms are rigid and less flexible than a cash advance. The interest rate is very low thanks to the low interest rates, but the borrowing rate is also very low. Keep in mind that consumers should always understand that the financial market is constantly changing. For example, a home savings contract concluded today with its terms and conditions in five years' time can be inefficient or save money if the interest rate situation changes drastically.
If you need short-term money to bridge a financial bottleneck or pay a specific bill on time, make the right choice with a mini-loan. The provider works reputable, fast and reliable, so you receive the feedback and possibly also the payment on the day of your request. A bank loan is recommended due to the many disadvantages nowadays only for large investments.