When looking for the right mortgage, those interested also come across insurance companies that offer cheap loans, but also here applies – not only the interest rate has to be right, but the entire contract terms.
Buying or building a home is still high on many people’s wish lists. In addition to the general need to live in your own four walls or to do something for your retirement, tangible economic aspects also play a role: rents are still rising, and prices for houses or apartments are rising – building interest on the other but are still very low.
Long runtimes offer planning security
The right financing or mortgage lending for the house there are not only banks. More and more insurance companies have entered the market and, according to current media reports, are also offering attractive conditions – especially for long-term financing with a term of 15 years or more. Besides, insurance companies sometimes offer longer terms than are available from many banks. Up to 30 years are even possible.
The entire contractual framework has to be right
However, the interest rate and long term should not be the only criteria when looking for the right financing. Anyone who relies on long-term planning security for their financing must generally also keep the following points in mind:
- POSSIBLE LOAN AMOUNT: When comparing offers, interested parties should always pay attention to the possible loan amount. In the case of long-term loans, for example, insurance companies sometimes only finance 60 per cent of the mortgage lending value of the property. Consequence: You need more equity.
- REMAIN FLEXIBLE AS POSSIBLE: Whether the loan comes from an insurance company, bank or building society – the loan agreements should allow outstanding repayments and changes in repayment rates. Because what you save on interest should be invested as directly as possible in a higher repayment to drive debt relief more quickly. Necessary: “This flexibility in the repayment can have a direct influence on the interest rates in individual cases,” Unger points out. Comparison is, therefore, also a must here.
- DISCHARGE YOUR DEBT FASTER: Anyone who has additional income – for example, bonuses from the employer or an inheritance – can use this for outstanding repayments. In this way, the loan is also paid off faster, and you also save interest.
- BUYING A HOUSE IN THE FUTURE: If you don’t want to build or buy for a few years, you should secure the low-interest rates with a home loan and savings contract. Customers initially pay monthly instalments or more flexible special payments into this. Later you have the option of a building society loan at an interest rate that has already been agreed today – favourable.
A secure foundation for your own home
However, it is not easy, especially for laypeople, to keep track of the massive range of financing options or to correctly decipher every clause in the contracts. In this way, together with the customer, they put the house purchase on a secure foundation.