Follow-up financing - 3 possible models explained
It pays to take care early
For many real estate loans, the fixed interest period ends after 10 or 15 years. Nevertheless, in most cases there is still a residual debt at this point. So it makes sense to deal with follow-up financing at an early stage in order not to be under time pressure. Our experts will be happy to help you find the right model for you.
3 models for follow-up financing explained
Follow-up financing - 1st extension
With a prolongation, you extend your loan with your previous lender, but with new conditions. As a rule, you will receive a new interest rate offer from your bank some time before the end of the fixed-interest period. Alternatively, you can of course try to find a new interest rate offer yourself. With the signing, the loan continues to run at the previous bank under new conditions. This procedure is very uncomplicated for you as a borrower, but in many cases you can get better conditions from other banks.
Here it can happen relatively quickly that you take a dangerous path under the influence of various comparison portals. Even if it is apparently possible to carry out a quick and easy comparison using various providers and thus find the best offer directly, experience has shown that this is difficult in practice. One of our consultants will show you various options in personal contact and enable you to compare concrete offers tailored to your needs.
Follow-up financing - 2nd rescheduling
In the case of debt restructuring, the new lender redeems the loan when the fixed interest rate expires and in return receives the land charges as collateral. Your follow-up financing will be taken over by a new bank with different conditions. In the case of debt restructuring, notary and land register fees are incurred for the assignment of the land charge, but these are usually in the range of a few hundred euros and are therefore within a manageable range. Even a small interest advantage more than compensates for these fees.
As a borrower, you should not shy away from debt restructuring, because the cost of debt restructuring is significantly lower than most people think. The credit institutions regulate the assignment among themselves, as the borrower you do not have to do anything else. In general, rescheduling the home loan usually only makes sense at the end of the fixed interest period, because a prepayment penalty is charged if a loan is redeemed prematurely. However, according to legal regulations, ten years after the loan has been paid in full, there is always the possibility of repaying the loan with a period of six months.
Follow-up financing - 3rd forward loan
Up to 60 months before the end of the fixed-interest period, you can secure the new conditions for follow-up financing with a forward loan. In this way you can secure the currently very favorable interest rates for the future. The forward loan is a regular, fixed-rate annuity loan. However, you do not pay any installments until the actual payment date and the lender does not charge any commitment interest. Normal follow-up financing, on the other hand, can only be concluded at the earliest six to twelve months before the end of the fixed-interest period and, if necessary, with commitment interest. With a forward loan, you can already secure planning security for the future.
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