Zero-percent financing and consumer loans are easy to get today. Saving for the consumption of today and not saving before is tempting. Unfortunately, many consumers still see it that way. In plain language, however, this means that once the grace period is over, the monthly rate can be expensive. In the worst case, the customer is then no longer able to pay his consumption from the current income. So that you do not fall into the debt trap, we want to inform you here about some pitfalls in the area of financing.
Low interest rates when buying property
For some years there has been a real real estate boom in Germany. The prices for houses and apartments in the cities are rising steadily and always let people dream of home ownership . The whole thing is driven by the still historically low interest rates. More and more people are tempted to make use of the particularly favorable loans. In theory, these conditions seem almost too good to be true, because never before has homebuyers could borrow as low as now. From a psychological point of view, such offers literally encourage consumption. The customer is more risk-averse and makes himself property , even if he can not really afford it. The problem is, who gets involved, which may later threaten the debt trap .
The full financing
If a real estate purchase failed several years ago in equity , this is no longer a problem today. The former rule of thumb that mortgages should cover at least 20-30 percent of the purchase price with equity has become more or less obsolete. The concept of full financing has existed in countries such as the USA and Great Britain for years and is now gaining more and more importance in Germany as well.
In the case of full financing , the bank extends the entire purchase price so that the buyer can obtain a new home even without equity capital .
Caution interest rate
However, as independent mortgage lenders, we call for caution because the interest rate on a mortgage loan always depends on the risk to the bank. The less equity capital is covered by the buyer, the higher the risk for the bank and hence the interest rate for the client. Particularly high interest rates are payable to a buyer if more than 80 percent of the purchase price of a property is taken out as a loan. It is therefore advisable to finance at least 20 to 30 percent of the costs through equity . Of course, as this is not always possible, especially among young real estate buyers, subordinated development loans can help to optimize interest rates by optimizing the financing structure.
With the CCM mortgage calculator, you can get an overview in advance, what is waiting for you in a possible real estate purchase . So that all open questions are really clarified, you are welcome to make an appointment with us.
The zero-percent financing seems like another miracle cure from the world of finance. The name of the financing alone, attracts many buyers when buying a washing machine or a television with alleged financial stealings. The words zero and percent give the consumer a kind of free. But consumer organizations warn against taking the zero-percent funding lightly. Often hidden costs behind zero-percent financing hide. Among other things, processing fees or a residual debt insurance may apply. These hidden additional costs can quickly make a supposedly interest-free financing expensive.
As practical and tempting as the concept of today’s buying and tomorrow’s payment seems to be at first glance, on closer inspection, however, there are some pitfalls. A critical consumer awareness is therefore more important than ever today. Investigate alleged bargains and find out exactly what costs might come with the chosen financing model.
Do you have anymore questions? Or would you like more information on funding , subsidies or similar? Your CCM Finance partner in Kiel, Hamburg and Flensburg is at your side from the initial consultation through to the purchase price payment. For CCM your wishes and possibilities are the focus of personal consultation.
Do not waste time and make an appointment with us for a free and independent consultation – your CCM Finance partner!