Building society savers: The combination of equity and building loan

 

In July 2015 alone, Agree banks provided more than 25 billion USD to private households for the construction loan.

An impressive number that emerges from the interest rate statistics of the Cream Bank.

Builders have probably put much larger sums into their own homes.

After all, families often bring equity capital. Part of the savings is likely to be in the home saver .

Hasn’t the building society contract been a thing of the past?
Where is far-sightedness needed from the client’s perspective?

Building society savers – credit and savings from a single source

Building society savers - credit and savings from a single source

At first glance, the building society contract looks somewhat antiquated and is getting on in years, given all the modern financing instruments.

However, there is a concept behind this that still applies in the 21st century when it comes to building loans. The home saver combines a comparatively low-interest loan with previous savings efforts.

The basic structure of the home saver is – despite the different products – similar. The savings phase begins after the home savings contract has been concluded.

As a client, regular payments are made to the contract – until the minimum balance is reached. When the allotment maturity is reached, the building society customer can not only use the saved credit. A building loan with an agreed interest rate is available for call.

Bausparer: It is now also available as a combination product

Bausparer: It is now also available as a combination product

The classic building society contract has one major disadvantage – the long saving phase. Five to seven years pass quickly here, which building society customers have to wait for capital. In the meantime, however, there are alternatives that rely on a connection between the home saver and an advance loan.

Here, the household closes a building society savers, but also takes out a bank loan – the advance financing. The latter immediately ensures liquidity. Generally sufficient as a maturity loan, only the interest payment to the bank flows during the term of the advance loan. The loan amount is replaced with the due service from the building society contract.

  • The latter is to be saved during the term of the advance financing. However, whether the combination of building society contract and advance loan really pays off does not depend so much on the monthly charges. Rather, it comes down to a detailed look at the combined lending rates. It often turns out that the total effective interest rate is borne by the borrower. Based on this situation, it is advisable to check all options at this point.

Can you buy a house with a loan repurchase?

The repurchase of credit is known to allow to renegotiate its rate and / or to gather several loans in one, it can also allow to buy a house, under certain conditions.

You can actually buy a house with a loan buyout, but the eligibility for this type of project depends on several factors, including the borrowing capacity of the household. A household in debt at almost 33% of its income may find a little financial margin by extending the repayment period with the repurchase of credit but this will probably not be enough to allow the addition of an amount dedicated to real estate financing. It is important that the household has a sufficient capacity to get into debt but also a remainder to live within the authorized limit, it is quite simply the sum which remains each month on the bank account after deduction of the regular charges.

 

Buying a house with a loan buy-back: it’s possible

You will understand, the debt capacity is the key word in this type of operation and an owner who already has a property will be easier to get an agreement because he can offer his main property as collateral, which a tenant cannot necessarily do so. Whether the borrower has consumer loans and / or real estate loans in progress, nothing prevents him from carrying out a loan repurchase simulation by adding the amount of his real estate project when entering the form.

 

Home loan with a buyout of consumer credit

Home loan with a buyout of consumer credit

Some households with only consumer loans are also interested in the project of grouping the credits into one and adding to the financing a home loan, which will be used to buy the house. In this case, two solutions are possible, a grouping of consumer credit which makes it possible to combine consumer loans with the subscription behind a mortgage. The second option is to use a credit repurchase including the consolidation of consumer loans and the addition of an amount dedicated to the financing of the property. The advantage of loan repurchase is to be able to adapt to the needs of the borrower and therefore consequently to his projects. The credit buyout simulation provides a quick and free initial overview of the feasibility for these types of financing.

You should know that this solution is generally requested by borrowers owners or SCI wishing to invest in real estate, the presence of a first property can in fact constitute a guarantee for the second, this is possible in the context of a buyout mortgage credit. We will calculate the amount to borrow based on the value of the first property, so this is called the mortgage ratio. It is necessary to use a mortgage buyout establishment to obtain this type of financing, here again simulation remains the best solution to compare the different proposals.

Building loan: tips on the loan terms

In the wake of the 2007 financial crisis, which went hand in hand with the Lehman bankruptcy, and the European sovereign debt crisis, borrowers became the winners. Financing – like the construction loan – has become significantly cheaper in recent years.

A fact that seems to blind some households. When it comes to building finance, contracts are simply signed that are not understood. The loan conditions are the binding set of rules for all those involved for years to come.

Loan Terms: The Guide to the Building Loan

Loan Terms: The Guide to the Building Loan

Basically, the loan conditions regulate all important aspects that play a role in mortgage lending. This includes:

  • Interest rates
  • Fixed interest rate
  • Repayment terms
  • Commitment interest, etc.

Why is it so important from a consumer perspective to deal with every aspect of financing in detail? Quite simply: In the terms of the building money, clauses and conditions can be hidden, which become a boomerang for the borrower when repayment begins.

  • A construction loan is raised, which includes 150,000 USD. Unfortunately, the builder did not get enough information about the special repayment. This is not provided for in the loan agreement. Another bank would have offered him five percent special repayment per year. The consequences are serious since the household regularly receives bonus payments from the employer.

A simple example that underlines the scope of the loan terms. What should be particularly important to you?

Which conditions are particularly important?

Which conditions are particularly important?

It is difficult to arrange the individual loan terms according to a list of priorities. The bottom line is that the overall package must always fit the individual framework.

But: Some points are almost always important. This includes the special repayment mentioned above.

Repayment and fixed interest rates also play a role together. How can this be explained?

The initial repayment determines how much of the loan the client will return to the bank in period X. The fixed interest rate as a framework for the duration of the validity of the interest rate can be used in low interest rates to pay off the loan on favorable terms, possibly even within the fixed term – if the initial repayment is correct.

Conclusion: The loan terms are extremely important for mortgage lending. Every household has to be clear about what they ultimately signed.

Loan for renovation.

If you want to renovate your apartment or house, you do not always have cash immediately. Depending on how extensive wallpapering and painting or laying new floors, such a general overhaul of the house and apartment can be quite expensive. A loan for a renovation can be obtained from a bank or privately under certain conditions.

Personal loan for renovation

Personal loan for renovation

If you want it to be quick, you can get the money you need for a renovation within the family or from a friend. Such personal loans are often free of interest and a Credit Bureau entry is also pleasantly omitted. The repayment can be regulated individually, but should also be made to relatives and acquaintances regularly and reliably.

If business premises or offices are to be renovated, you can also try to obtain a personal loan via a corresponding platform on the Internet. There private individuals lend money against interest to other private individuals who need the loan for certain projects and business ideas. This can also be a loan for the renovation of a café, a restaurant or other business premises. In such a case, it is important to plausibly explain the reasons for the need for renovation.

Credit through the bank or building society

Credit through the bank or building society

In the case of smaller sums, a loan for a renovation can be obtained via the existing overdraft facility in the checking account. The advantage is that you have the appropriate amount, provided that your creditworthiness is available, and you can buy the materials for the renovation. However, an installment loan is cheaper in terms of interest, which is generally easy to obtain given creditworthiness and good Credit Bureau information, as well as regular income or payments to a business account.

The borrower should not forget, however, that every bank loan in Germany results in a Credit Bureau entry. A installment loan can also be obtained from direct banks on the Internet. The right contacts are also building societies, which grant low-interest special renovation loans.

Swiss credit or funding as alternatives

Swiss credit or funding as alternatives

If the renovation costs do not exceed USD 3,500 or if you can add something out of your own pocket, a Swiss loan is an alternative as a loan for a renovation. The advantage is that banks in Switzerland do not query the German Credit Bureau and do not forward any credit data to the Credit Bureau.

Interest rates are quite high, however, and the bank in Switzerland also requires proof of regular income above the statutory garnishment limit. Unemployed people and start-ups who want to finance a renovation have no chance here, the upper age limit is 58 years at best, often only 55 years.

Anyone who owns a house or apartment can receive funding from the Cream bank in Frankfurt, which promotes investments in environmental protection and innovations on favorable terms. This is the case, for example, if the renovation is accompanied by an energy-saving renovation or the installation of an old-style bathtub creates new living space for the elderly.

There is a low-interest loan for a renovation through Cream bank for private individuals, start-ups and companies, and it is always worth asking. Forms can be filled out and sent online. You can also discuss with your bank advisor what type of public funding of home renovation might be considered.

Loans for seasonal workers

Loans for seasonal workers 

Loans for seasonal workers 

Are they expected and what are the loans for seasonal workers? Sure, there are, but within certain limits and under certain conditions! Before describing what the aforementioned constraints are, let’s briefly mention the ” presumed ” reform carried out by the so-called Dignity Decree of 2018: well, despite what we read in the titles of many articles on the net, as soon as these are deepened, we realize that the the aforementioned dignity decree has NOT brought anything new in favor of the hundreds of thousands of workers with seasonal contracts: it has left everything as it was before.

Do you think that, despite this “reform” (which has affected fixed-term contracts), in 2020, work for seasonal activities is substantially regulated by a law dating back to 1963, precisely by Presidential Decree no. 1525/63. Ultimately, the only benefit for seasonal workers is and remains that of the right of way, that is, the right to be preferred over new hires regarding the next working season.

Seasonal loans & right of way.

Seasonal loans & right of way.

This pre-emption is important in the case of loans for seasonal employees. In fact, in addition to securing the job for the next season, the right of way could (we use the conditional) constitute, as we will see, a “reference” in front of a bank and/or financial institution to which we will ask for funding. We remind you that the right of precedence is exercised in writing, possibly by registered letter with return receipt, and within 6 months from the termination of the seasonal employment contract.

The right to be “preferred” presented in writing has an annual validity: if within the year the employer wants to make new hires, the previous seasonal worker who has expressed in writing the will to re-work with the same employer, takes precedence over others. But all this speech (the precedence expressed in writing) has one premise: that the seasonal worker has been hired with a regular employment contract. Otherwise? Let’s see it later.

Personal loans for irregular seasonal workers:

Personal loans for irregular seasonal workers:

Without many words we refer to all those who perform tasks although seasonal but in the dark! Unfortunately there are and there are also many. What to do with this case? Where interested, we can do no more than postpone a study on loans for undeclared workers.
If, on the other hand, you have a regular contract and you intend to apply for a loan, then the aforementioned right of precedence may prove useful: copy a copy of this and present it together with the documentation. Consider that the institution may not consider being preferred in the next work season reliable.

This depends above all on who the employer is: think of a large, famous company that has been using seasonal workers for many years to put its goods and/or services on the market (a panettone, a wine, a tour operator, etc.). ). In these cases, the bank or financial institution to which you turn, considers the re-assumption by a well-known brand as certain with respect to an unknown employer and therefore could grant you the financing with reasonable repayment times. Yes, because the main problem of seasonal workers is precisely that relating to the payment period of the installments.

Loan for seasonal workers:

Loan for seasonal workers:

The real problem. Anyone who does any seasonal work, even if it is in order, has a problem: the very short payment period within which all the financing will be repaid. In truth, the aforementioned problem is common to all types of loans for fixed-term workers to which we refer further details. What are we talking about? Let’s say that a seasonal employment contract hardly exceeds six months, therefore the loan must be repaid within this period or in six installments. But the problem is not if they do it: we have also indicated them on a loan with a 6-month contract and who does it.

To obtain such a short loan, in practice, you should make a prompt request during the first days of work otherwise then it becomes useless! In the end, if we are denied the loan or want a loan longer than half a year, we need collateral: which ones? First of all, a third party guarantor who could also be the employer (or the legal representative if you work in a large company), perhaps equipped with the document that contains the right of precedence. If that doesn’t work, extreme forms of credit remain, e.g. the lien or the loan in bills.