Finanzierung mit ZIEGERT
November 08, 2024Tips for successful real estate financing
FinanceInterview

In conversation with our ZIEGERT financing expert Steven Peach

What you didn’t know but always wanted to know: Our Real Estate Finance Manager Steven Peach provides expert tips on all aspects of real estate financing. Find out more about the right use of equity, the right timing and other important aspects.

Steven Paech | Senior Finanzierungsberater
Immobilien finanzieren mit ZIEGERT

Financial basis: the right use of equity

The basic principle for any real estate financing is not to use all of your equity. As a rule of thumb, I would always retain around 3 to 4 months’ net income as a risk buffer, because it is impossible to calculate unforeseeable costs.

When it comes to determining the exact amount of equity to be invested, this should ideally also cover the ancillary purchase costs, which make up around 10 to 15 percent of the property purchase price. These include land transfer tax, notary fees and any estate agent commissions.

It is also advisable to be able to cover at least 10 percent of the purchase price with your own capital, as this is currently reflected in better interest rates than full financing. The rule is: the more equity, the better. However, properties can also be financed with little or no equity and we will find a tailor-made solution for everyone.

Real estate financing must fit into your life: The right rate

How much property can or do you want to afford – how high can the monthly installment be? On paper, you can afford a lot. But you shouldn’t feel the impact of real estate financing. The installment should be a monthly debit that simply runs in the background. And from time to time you can benefit from special repayments.

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ZIEGERT: Die richtige Zinsbindung wählen

In the short or long term: the right fixed interest rate

Fixed interest rates are a bit like buying shares: the ideal term is difficult to define. If the rate is advantageous, a longer fixed interest period of at least 10 years is of course worthwhile. But interest rates and purchase prices are fast-moving and in constant flux – sometimes contrary to each other, sometimes to the benefit or detriment of the buyer. Here too, a personal consultation is advantageous in order to find the perfect solution depending on individual wishes and requirements.

Interest is not everything: the right framework parameters

Although the interest rate plays a major role in real estate financing, there are also important secondary factors that can have a positive impact on the financing conditions. For example, the repayment is of great importance, as the repayment rate and special repayment options can significantly shorten the term of the loan agreement.

State subsidies such as KfW subsidies can also be taken into account, depending on the type of property. And in certain cases, installment breaks are also helpful. In general, it is important to take a holistic view of the financing process and factor in important framework parameters.

Immobilienfinanzierung mit ZIEGERT: Das passende Timing

Timing is the be-all and end-all: the right points in time

Good timing is not only important when it comes to fixing the borrowing rate. You should also always keep an eye on important deadlines. A good example is the 14-day revocation period after signing the loan agreement. If you do not make use of the real estate financing after the revocation period has expired, it is not uncommon for the bank in question to charge high non-acceptance compensation payments due to the fees already incurred and lost interest income.

A heart for numbers: The right contact person

While many work purely on the basis of figures, I personally also focus on the emotional and psychological level. After all, buying a property is also a very emotional process – and for many, a unique one. First-time buyers in particular have many questions during the financing process, which I am always happy to answer. That’s why I recommend asking everything in advance and not afterwards. It’s my motto that you should only sign when you really understand everything – because after that it’s unfortunately too late!

And what I often tell doubting customers when they are afraid of long loan terms:

A 20- or 30-year term may seem long now, but you’ll be paying rent for the rest of your life.

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Your inquiry has been successfully sent to us.Sorry, your inquiry could not be sent. For further information please contact kundenservice@ziegert-immobilien.com.

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