Real Estate Booming: Thanks to historically low interest rates home loans are as cheap as they are rare. That makes building and buying real estate particularly attractive. Consumer advocates, however, urgently recommend comparing different financing offers. In a review of Financial Test magazine, the testers found that consultants do not always give consumers all sorts of benefits.

Picture: Dream house 

Why is building or buying a house worthwhile at the moment?

Long-term construction loans with fixed interest rates for ten to fifteen years are currently available with interest rates of around three percent. However, real estate prices have risen significantly in recent years, especially in large cities.

Are real estate a good investment?

Real estate is not considered a return killer. However, according to consumer experts, they are a sound investment, especially in times of crisis. The value of a property is relatively safe – provided price, quality and location are right. In any case, a real estate purchase should be well considered.

How do I find the cheapest loan?

Here only helps a comparison of the various providers, with the selection of loans according to Stiftung Warentest is currently particularly large. Builders and buyers can use comparison computers on the Internet. Also, consumer magazines and newspapers often provide current interest rates. The house bank can be an important contact – but is not always the first choice. A provider comparison can sometimes save tens of thousands of euros.

How does a construction loan work?

Loans for houses or apartments usually run for ten, 20 or 30 years. As a rule, interest rates are only set for a limited period of several years. If this so-called fixed interest period expires, bank and customer negotiate the extension of the loan. The builder can then also umschulden and switch to a cheaper provider. Consumers should seek new offers several months before the deadline expires. Because of the historically low interest rates, there are currently also particularly favorable follow-up loans.

Are the credit rates always fixed?

In itself, fixed monthly installments are agreed. However, construction loans often also give the right to special repayment, ie a repayment in addition to the agreed installments. It can also be negotiated that the client can adjust the rates, such as when the income changes.

How much money do I have to raise myself?

Financial experts see equity of 20 to 30 percent of the property price as a solid base. For their offered top interest rates, however, banks often want to see 40 percent equity. Some banks are also willing to finance the full purchase price. But they usually demand hefty risk premiums on interest.

Is there money from the state?

The State Development Bank KfW offers loans, for example, for the purchase of owner-occupied residential property, energy-efficient construction and renovation or for age-appropriate living. In addition, the state pays the housing premium of 8.8 percent in building society savings. There is also state support in the form of the so-called residential Riester for the purchase of self-used real estate for retirement.

What happens if I become unemployed or incapacitated for work?

Risks such as these can be fully or partially covered by insurance. So there are insurance against occupational disability, unemployment, life insurance or residual debt insurance. Consumers should seek good insurance cover before concluding a policy and a home loan. Stiftung Warentest advises on insurance in the event of death.

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