Bank advance loan – Tips for a slightly different building loan

Different concepts and approaches have been established in connection with real estate financing.

Taking out a building loan and using it to move into your own house is only one way.
Households also repeatedly resort to advance bank loans .

What is behind it?

In some cases, taking the advance bank loan can pay off.

At this point, builders must also be clear that the bottom line is that the construction loan can become more expensive.

Advance bank loan: what’s behind it?

Advance bank loan: what

The term bank advance loan is closely related to the building society contract. Although this provides equity capital and a low-interest loan, borrowers must save a certain minimum balance, which usually takes several years.

At this point, the advance bank loan takes the position of advance financing – it bridges the period until the home loan contract is paid out.

The special feature is that the loan amount for the advance loan is identical to the sum from the building loan contract. Ultimately, the building society customer replaces the sum raised through the advance loan with the payment of the building society contract.

Term and repayment of the advance loan

Term and repayment of the advance loan

Advance financing has the advantage that it immediately provides the client with liquidity – without having to put up with waiting times. With regard to the repayment, this is generally a final loan. The loan amount is only transferred to the bank as a one-off amount at the end of the term.

In contrast, only the interest – usually in monthly tranches – is paid to the bank during the term. This keeps the construction loan clear in the monthly charges.

  • The combination of an advance bank loan and a home savings contract generally means that payments have to be made in a home savings contract within the term, which means that the savings must also be saved. This aspect has to be considered in any case.

The term for the advance loan usually extends to periods between five to 15 years. Then the repayment is made with the home savings sum. This is followed by the repayment of the home loan. The bottom line is that construction finance quickly extends from 25 years to 30 years. A financial responsibility that every household needs to be aware of.

Conclusion: The bank advance loan paves the way into your own home today – although the building society loan contract can only be allocated the day after tomorrow. In any case, builders have to deal with the challenges of pre-financing in detail.

Sole ownership: Information for real estate buyers with home loans

If you are interested in buying sole property, there are usually two options: You buy a house or a condominium. Both have their advantages and disadvantages.

Acquire two property rights

Acquire two property rights

If you opt for the apartment, you actually acquire two property rights – one for special property and the other for shared property. The latter includes parts of the building that cannot be divided, such as the staircase or the communal garden. Special ownership is the actual sole ownership – that is, the parts of the building that represent the owner-occupied home.

In order to be able to acquire house loans, a declaration of division is ultimately required, which describes exactly what is part of the community property in the residential building and where the sole ownership begins.

Sole ownership or individual ownership is defined by the Residential Property Act. Completeness is a prerequisite. As an acquirer, sole ownership of parking spaces can also be established with the purchase in accordance with Section 3 (2) WEG – provided these are marked.

  • When purchasing a condominium, the declaration of division is always one of the documents that banks want to inspect for the building loan.

Home loan quick comparison

Home loan quick comparison

Real estate finance does not only play a role in terms of special property. Banks require partners to be jointly and severally liable for married couples and registered civil partnerships.

How can builders avoid this aspect? Sole ownership of a property can make sense if the building is partially subject to commercial use. At this point, the spouse’s entry can be prevented by the separation of property. The latter must be proven to the bank in the course of the application.

  • The problem of sole ownership arises not only in the context of mortgage lending, but also with regard to debt rescheduling, such as marriage during the term.