With the construction loan you can finance your own home. Among other things, your credit rating is important for the approval.
A construction loan, sometimes known as mortgage lending , is a long-term loan with the purpose of acquiring, constructing or renovating a property or rescheduling. For a construction loan equity is necessary in most cases, which covers at least the additional costs of building a house. Loans without equity are also possible, but significantly more expensive.
Construction loans are secured at the bank by a land charge registered in the land register (mortgage or sometimes also with a mortgage).
This is a security measure that entitles the bank to mortgage the property in the event of long-term repayment. Since the bank grants itself a high level of collateral , the credit risk is quite low, which in turn results in favorable interest rates. Therefore, the building loan is earmarked .
Basically, there is no maximum loan amount.
The amount of the loan depends more on the individual assets and income of the borrower and the value of the property.
remaining debt is negotiated on new terms. This so-called follow-up financing can be agreed with the same institution or with another lender. For follow-up financing, a thorough comparison is required again. Often it is possible to save again here and to repost the building loan on more favorable terms.
Holidays , nice restaurant visits and the like you certainly do not want to miss and belong to the quality of life. Last but not least, quite different things happen in life, such as marriage or children.
Try to estimate and plan all such events and financial changes as best you can, and use this list to set a realistic rate plan. Consider also the above-mentioned austerity measures when it comes to any future maintenance and repairs.
The biggest mistake is to overestimate yourself and then be overwhelmed with the repayment.