The annuity loan
Here, the borrower pays off the loan amount in fixed monthly (quarterly or annual) installments, with the regular repayment amount consisting of interest and principal. The interest component is higher at the beginning of the financing, but this decreases with the maturity and the repayment component increases.
The interest rate is fixed for a certain term (e.g. 5, 10, 15 years) and then re-agreed according to the market interest rate. The amount of the monthly installment can be freely defined, but it must contain at least 1% repayment. The rate remains unchanged during the fixed interest period. Special repayment options are possible with this form of building finance, but must be recorded in writing.
The repayment loan
The repayment loan as an installment loan is characterized by the fixed repayment amount, which remains unchanged over the entire term, and an interest amount, which is calculated on the basis of the respective remaining debt. The interest payment is thus continuously lower, which also gradually reduces the overall rate.
The Lite lender loan
If the interest and repayment rate are fixed for the entire term of the contract and the borrower pays a constant rate, this is referred to as a full repayment loan. This construction financing offers the planning owner a high degree of planning security, as the interest rate remains unchanged. The rate is based on the term. The shorter this is, the higher the monthly rate, since the repayment portion must also be set accordingly higher.
The forward loan is a variant of mortgage lending that essentially focuses on a high degree of planning security with regard to interest rate developments. With the forward loan, certain interest rates are explicitly set for the future, so that the borrower benefits from the lower interest rate even in times of rising market interest rates.
This annuity loan is paid out after a defined lead time, which can be up to 60 months after the conclusion of the contract. The term then begins with the payment. However, an interest premium is charged for this loan, which gives the bank security in the event of extremely rising interest rates. The forward loan is a popular instrument for follow-up financing.
Fixed-rate or final loans
In the case of a final loan, the actual repayment is only made in one amount at the end of the contract term. During the term, the borrower only pays the fixed interest in monthly amounts. The one-off amount for the loan repayment can result from life insurance, investment funds or building society contracts.
The home loan special
The home loan is one of the popular types of home finance. It is linked to a home savings contract. The home savings contract, in which the borrower pays monthly amounts with interest, saves capital that secures him a low-interest loan. If the building society contract is ready for allocation, there are various procedural options for the building society saver. He can then avail himself of the home loan and have the saved amount including the loan amount paid out, a postponement or a later payment of the loan are also possible. If the loan is waived, the savings amount is paid out when the allocation is ready.
However, the home loan can only be used for residential purposes such as new construction, renovation, refurbishment, modernization or the purchase of a property. The repayment takes place in constant monthly installments with interest and principal payments.
Mortgage lending with or without equity
As a rule, mortgage lending requires an equity share of 20-30% of the loan amount. If there is no equity, full external financing or full financing is possible, in which the entire capital is provided by a loan.
Mortgage and land charge as collateral for the lender
If you want to build a new house or buy a property and have little or no equity yourself, you will in most cases have to provide collateral for the lender. Mortgage and mortgage are possible here. These indicate a lien for the lender, which is entered in the land register. In the case of new buildings, mortgages and land charges are usually entered on the value of the property, since there is still no finished property. If the repayment obligations are not met, the bank can order an auction of the property or property in order to service the loan from the sales proceeds. While a mortgage is canceled after the loan is repaid, the mortgage can continue to exist.
The muscle mortgage is a special feature of home finance. Here, the client’s own work is valued like equity. However, home builders should not overestimate themselves, because firstly a lot of strength, endurance, manual skill and specialist knowledge is required and secondly not all the construction work can be done independently, which they require trained and experienced specialists, e.g. heating, gas, water installation or electrical installation.
Construction finance for online banks and loan brokers
The diverse models of mortgage lending are not only available in the branch bank of trust, online banks and credit brokers on the Internet have long since expanded their offerings to include construction and real estate financing. A comparison of the financing offers is always advisable.