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The dream of your own home – first step: mortgage lending

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If you want to realize the dream of your own apartment or house, you need the appropriate capital. Very few have so much money that a property can be paid for immediately. Therefore, many buyers take out a loan in order to be able to pay for the property they want. As a rule, one speaks here of mortgage lending. The most important facts are explained here.

Requirements for a mortgage loan

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More and more people are considering taking out a loan. In 2015, according to Statista, loans totaling 1,111.16 billion euros were granted. Especially when it comes to your own property, mortgage lending is a good alternative to finance your own wish. It is important that this form of financing is always adapted to your own living conditions. Therefore, your own financial leeway should be carefully considered and in which installments and in which period the loan can be repaid.

What is mortgage lending?

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Mortgage lending is usually a loan for the purchase of a property or real estate. Banks, insurance companies and building societies usually issue a mortgage loan that starts at 30,000 euros. The financing is provided by an entry of a land charge in the Land register secured. In the event of the borrower’s insolvency, the lender can fall back on the financed property. The borrower pays the bank a monthly repayment installment. The conditions of the mortgage lending including interest payment depend on the respective bank and should be checked carefully beforehand.

The four pillars of solid mortgage lending

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A home loan consists of four elements: equity, loan, subsidy, and muscle mortgage. But what is it exactly?

An important part of mortgage lending is equity. This should usually consist of 15-20% percent. A home loan and savings contract can also be of assistance in saving the equity. In addition, the loan is an important basic requirement to finance the purchase of the property. These will offered in various forms.

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In addition, there are numerous grants and low-interest building loans. The federal states and municipalities also offer favorable conditions to enable the project from your own home. Also the Residential electorate promotion can be used for quick repayment of a home loan.

The muscle mortgage is primarily about initiative. Parts of the interior work can be done by yourself. Of course, this requires a few manual skills. This can save up to 10% of the required costs. If friends and acquaintances help with this, it is important to report this to the professional association for the construction industry, even in the case of unpaid work.

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