Financing Real Estate in Germany

Financing Real Estate in Germany

Natasha, November 25, 2024

Process of Financing in Germany ?

Real estate financing is a responsible process that requires preparation. Here are the key points you should know:

  1. Document Preparation

To enable the bank to review your application, prepare the following:

✔️ Passport and residence permit (if you are a non-resident).

✔️ Proof of income (statements for the last 3–6 months).

✔️ Information about the property (appraisal, plans, photos, land registry extract).

✔️ Proof of equity (down payment).

  1. Choosing the Bank and Conditions

✔️ Compare the effective interest rate – this includes all additional costs.

✔️ Decide on the interest rate lock-in:

◦ Long-term (10–20 years) – stability.

◦ Short-term (5 years) – potential savings.

✔️ Pay attention to the possibility of partial or complete early repayment without penalties (special repayment).

  1. How to Apply Without Risking Your Credit Rating?

✔️ Always ask the bank to create a "condition inquiry" – this is safe for your credit report.

✔️ Avoid "credit inquiries" that will be recorded in your credit history, even without approval.

  1. Approval and Loan Issuance

✔️ After submitting the application, the bank will assess your creditworthiness and the value of the property. The process takes 5–14 days.

✔️ Carefully review the contract before signing: interest rates, terms, fees.

Current Interest Rates and Recommendations

? In November 2024, mortgage rates are between 3.5% and 4% per year.

✔️ The higher your down payment (20–30% of the purchase price), the lower the interest rate.

✔️ Consider government programs such as the KfW Bank for favorable conditions.

Tip:

Compare the offers from banks in a table or consult an independent advisor to choose the best conditions and avoid mistakes.

Your attention today – that’s a profitable deal for tomorrow! And we, as mentioned, will help you wherever we can ?✨

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