Due to the ever increasing rents, there are more and more interested parties who want to buy their own property. In order for this is also financeable, there are therefore also many different loan offers. Often you have to equip yourself with equity. But that does not have to be the case with every provider. Even those who have no equity, can very well get a loan for mortgage lending or purchase.
So that the loan remains affordable, you should first inform yourself thoroughly. Here is an overview of what to look for in a loan without equity, what it actually represents, how interest rates are moving and more…
Credit without own investments – what you should consider
If you decide to buy your own property, equity is usually used. But what if this can not be paid right now, for example, because it is in an insurance or simply does not exist?
Here, the loans are worthwhile without equity, because in such cases, the only way is still to raise the purchase price yet. What you have to pay attention to, in the text…
The whole purchase price of the bank can be invested instead of equity capital
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With direct banks one can also get up to 100% credit for a home or apartment purchase, provided that one can show the appropriate income and a stable employment with permanent employment.
Buyers who have equity mostly opt for the 20% self-investment version. If you can not meet these conditions, then you have to look for an offer that covers the full sale price of the property.
That may even be worthwhile. Because, unlike in the past, today even at 20% equity, the buyer is required to cover additional costs, fees or brokerage costs. These are additional costs that have to be financed out of pocket in addition to equity.
To get around that requires a 100% loan to buy your own property. Buying a property completely at the expense of the bank or the provider means that a higher interest rate can be expected.
How to get a good interest rate on a loan without its own capital
For a loan without a saved money, the interest rate is usually higher. This is by no means always the rule. It always comes from provider to provider on the current level of interest. If this grows, it can well be that a loan without own capital is worth more than to invest your own saved money. Here is a concrete example that describes this situation.
If you invest, for example, 10000 euros in the purchase of your own house, which should cost a total of 100,000 euros, so you need a loan for the remaining 90000 euros.
With the loan without own down payment, one needs all 100,000 euro in the form of a loan. Let’s say the interest rates were 2.7% on signing the 100% loan. Then you owe after 10 years still about 57,000 euros.
In the case of a loan with 10,000 euros of own investment, interest rates have risen, for example, which would mean a residual debt of more than 60,000 euros after 10 years, despite the bank’s own saved money. In this example, which may well occur, it is worth it for the owner so more to take the full amount in the form of a loan, so the own invested money for a bottleneck and you buy the home anyway.
Here the situation has arisen where equity has been swallowed up by the higher interest rates and you end up sitting on higher residual debts than with the 100% loan.
Risks of a loan without self-financing
Without risks, this form of credit does not remain. Consumer protection has repeatedly pointed out that with a 100% building loan one can overestimate oneself, which can lead to a threat to one’s own existence, in the worst case scenario.
For example, you may not be able to follow the monthly rates for a variety of reasons. If you are sick or unemployed, the monthly installments for the property are increasing. If the prices for real estate are still the same or even lower than at the time of borrowing, then you can get up to 20% less total price.
So you not only lose the property, which is auctioned because of the unpaid installments, but there are still additional costs on one. Before deciding to take out a loan without its own investment, consultations with the bank or the financial advisor should definitely be sought.
Advantages of the loan without equity
Nevertheless, this form of credit also has many advantages. You do not have to save money to get your own home, but you can also use other circumstances that can be considered as capital. For example, own contribution.
In-house performance means that, as long as you have a hand-crafted talent, you can do some of the work that is under construction yourself. This partially saves costs that can be calculated in equity. In addition to own contribution, land owned by the buyer is also considered capital.
If you do not have any of this, you have to take out a full loan. A clear advantage of this type of financing is that you can use the living space immediately and do not have to wait years until you reach the sum of 20% for your own investment.
High repayment and well-intentioned – tips when a loan without own capital is worthwhile
Such a form of lending is particularly suitable for those who can afford more in the year than the total credit costs. Even high repayments that arise in such a loan, you have to accept. For example, this can cause a lot of costs every year at 3% eradication. Above all, buyers with lower or middle income could have problems with the eradication.
The paradox is that, especially as a large earner, you have more benefits from full financing. The providers are more likely to withdraw from self-employed or self-employed buyers. A high and secure income is therefore very important for a full loan for the home.
Very often it is smarter to choose a property that costs less if you have no equity, because the smaller this is, the higher the loan can turn out.
It is often the case that after buying a condominium or a house you get unexpectedly money. For example, an inheritance. The tip here would be to use this money as capital for special repayments. You can also invest the money and earn something from it, before you invest it. Here you should have a knack for investment.
Further tips for a full financing
- The effective interest rate should always be compared well
- Consider fees (for processing etc.)
- Costs of account management should not be forgotten
At lower interest rates you should try to pull the low interest rate period as long as possible. If possible, at least 10 to 25 years. So you can keep the total costs in the end in the frame and there are no additional costs, which have increased by a growing interest rate the total.
First and foremost, as a middle-income buyer, you should not resort directly to a full 100% loan. This form is more suitable for wealthy or young people (including civil servants) who have a high income and a secure employment contract.
Getting advice can never be wrong. Although you can compare the offers online, this is not enough if you want to take on such a high credit.
A consultation with the provider or with the financial advisor can certainly contribute much to the decision and protect against unwanted risks or existence. Well thought is half won, one would say here.