The question, who does a mortgage, is almost obvious. As mortgage lenders, banks, savings banks, building societies, life insurers and some pension funds are eligible. However, potential real estate purchasers do not necessarily have to go to one of the providers themselves. There are mediators who advise on mortgage lending. They also have the necessary experience with mortgages. When it comes to mortgage lending, a comparison portal on the Internet also helps to get an initial overview. Here, not only the question is answered, who offers the cheapest home financing, but also how it runs.
How much real estate can I afford?
Of course it helps if the future property owners first of all find out how much property they can afford. This means that, first of all, a cash-fall is due to see how much equity is available. To be considered as equity
- cash assets
- Life or pension insurance with the exception of state-subsidized products
- savings contracts
- related loans
- Company loans
However, it is advisable not to include all own resources in the financing, but to consider a safety cushion.
The question, who does a mortgage, is almost obvious. As mortgage lenders, banks, savings banks, building societies, life insurers and some pension funds are eligible. However, potential real estate purchasers do not necessarily have to go to one of the providers themselves. There are mediators who advise on mortgage lending. They also have the necessary experience with mortgages. When it comes to mortgage lending, a comparison portal on the Internet also helps to get an initial overview. Here is also the question answered, who offers the cheapest mortgage lending.
What is the loan for mortgage lending?
The amount of mortgage lending is based on three questions:
- How much equity do I have for mortgage lending?
- What is the rate for mortgage lending?
- What is the mortgage lending value?
While the future real estate owner can answer the first two questions himself, the third question can only be answered by the bank or an appraiser. The mortgage lending value is based only on the location and condition of the property and does not take into account the current market prices. These fluctuating market prices reflect the market value.
As a rule, banks finance up to 80 percent of the mortgage lending value, building societies also. Mortgage banks can by law finance only 60 percent of the mortgage lending value, and insurance companies provide up to 50 percent of this value as a loan. The question of how much equity I need for mortgage lending also depends on the mortgage lending value and the funding institute.
Compare mortgage lending
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The real estate purchase agreement
After two or three viewing appointments at different times of the day, one of them with an appraiser if possible, and agreement on the purchase price, the notary appointment takes place. As a rule, the buyer selects the notary. The draft contract must be submitted to both parties at least 14 days before the log-on date in order to allow sufficient time for the audit.
The notary must identify all participants with a photo ID. The notary reads out the sales contract, which is then signed. In advance, the notary has checked in the land register, whether all information about the object are consistent. The contract also receives an endorsement, which governs the transfer of ownership.
In the next step, the buyer should pay the land transfer tax very promptly. Without a proof of payment, the land registry will not become active. If the proof of payment is present, the opening warrant, that is, the land register is locked until the final entry of the acquirer as a new owner.
The notary also receives the power of attorney, later in the land register a charge, the mortgage, to register.
The credit agreement
The bank must have a complete financing plan to examine the loan application. In addition to the key data on the amount and annuity loan, this also includes the buyer’s proof of equity, the purchase contract, the relevant documents such as land register extracts and cadastral documents as well as the fire insurance certificate.
The Bank first determines the mortgage lending value, the resulting level of financing and the affordability of the loan to the borrower. Depending on the institute, an expert will be called in as well.
If the entire financing concept proves to be consistent, the loan agreement will be concluded, taking into account consumer protection guidelines. This also includes the indication of the date on which the amount must be paid to the seller or to the notary’s account. The bank does not transfer the loan amount until the notice of default has been registered and the municipality has waived its right of first refusal.
The object of the loan agreement is also the mortgage deed of purchase and the declaration of security purpose. With presentation of the land charge order deed, the notary can now register the land charge in the land register. The bank acquires a lien on the property with the land charge order.
As soon as the purchaser is registered as the owner, the deletion of the order is followed – the property is now finally in his possession.