Private property financing
An overview of private property financing
There are many reasons for private property financing: regardless of whether you are planning a new build, renovation or extension of a property, debt financing is possible and sensible in most cases. This is because private property financing is still possible despite the rise in interest rates.
However, various aspects, specifications and guidelines need to be taken into account in order to optimally structure such private property financing. Choosing the right financing partner is also essential for the success of your project. We offer you the right support here - our experts will work with you to design a private property financing solution that meets your needs.
Do you need personalised advice on suitable private construction financing? Your project is in good hands with us - get in touch for a free and non-binding initial consultation with our financing experts.
How can Finanzierung.com help you to finance a private property?
- Arrangement of customised financing
We will find the right financing partner for your individual case and actively optimise the conditions and collateral structures for you in order to achieve the most suitable debt financing possible.
- Optimisation of your property and creditworthiness documents
Your documents leave a lasting impression on potential financing partners and, in case of doubt, can be decisive for the success of private property financing. We help you to prepare your documents professionally and thus lay the foundation for your success.
- Negotiations with financing partners
Our real estate experts have many years of expertise in property financing. We know which levers are relevant and what makes banks tick. Our aim is to keep your conditions as favourable as possible - to achieve this, we negotiate actively and effectively with our financing partners.
- Advice in every respect
We don't just support you with financing issues - thanks to our broad network in the real estate market, we can provide help with many property-related topics. Do not hesitate to consult us - we will be happy to assist you quickly and comprehensively with any questions or suggestions you may have.
What factors influence your private property financing?
There are a number of factors that can influence the conditions of your financing. These include the use of the property and special regulations or legislation at the location. Other questions that will arise during the financing process include
What is the term of the financing / How is it structured?
Is it a new build / are renovations planned in the short term?
What are the general conditions (fixed interest rate, monthly instalment, repayment amount)?
What is the value of the property?
Do you have a good credit rating?
What is the location of the property?
It is important that you are aware of these factors and, if necessary, prepare suitable property documents and calculations in order to make a professional impression on financing partners. With comprehensive and consistent preparation, the prospects of successful private property financing increase.
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Private construction financing and state subsidy programmes
Depending on the specific structure of the financing and the future plans for the use of the property, it may be possible to take advantage of (state) subsidy programmes in addition to private construction financing. One example of this is the KfW loan, which is used to finance owner-occupied residential property. There are also other subsidy programmes - for example for the energy-efficient refurbishment of properties.
Feel free to contact us and let us advise you individually. We will discuss individual subsidy programmes with you and give you our assessment of the extent to which these could be relevant for your project in the context of private property financing.
What collateral is relevant for private property financing?
- Land charge
In the case of private construction financing, the respective lender is usually entered in the land register - this gives rise to an enforceable land charge in the event of insolvency. This is a lien that is noted accordingly in the land register. This can be a new entry or a transfer or assignment of the land charge.
- Acknowledgement of debt
Borrowers are usually also liable for a loan with their other assets. It is therefore common for the borrower to issue an enforceable acknowledgement of debt in addition to the land charge.
- Further securities
It is possible to secure the loan with other collateral. Examples of this are guarantees, life insurance policies or building society savings contracts, which can serve as collateral for private property financing.
What does the bank check before approving the loan?
The approval of a building loan usually involves a considerable amount of money. For this reason, every lender will insist on checking a few key points before approving private property financing:
- Condition and value of the property
- Collateral structure
- Income and other liabilities
- Credit history (Schufa information)
- Reason for the loan
Private property financing at a glance
A property loan is a long-term loan that is secured by a property. An annuity loan is usually chosen for this purpose. This type of private property financing can be utilised by private individuals as well as tradespeople, the self-employed or freelancers. Typically, this type of financing is used to finance the use of a property - either for personal use or as an investment.
Purchase
New building
Remodelling
Refurbishment
Debt rescheduling
It is not usually possible to cover the entire volume of private property financing with borrowed capital. As a rule, your equity should cover at least 20 per cent of the total outlay. The remaining 80 per cent is usually covered by borrowed capital (a property loan). Exceptions apply to borrowers with good credit ratings: they also have the option of taking out 100 per cent financing, although this is usually associated with higher interest rates.
For private property financing, borrowers must submit two types of documents to their lender: Creditworthiness documents and property documents.
Creditworthiness documents: Proof of income / Schufa credit report / tax statements / any loan liabilities / proof of own funds / identity cards / pension information
Property documents: Building plans / floor plans / current land register excerpts / area calculation / draft purchase agreement / cost estimates / photographs of the property / list of planned own work
We will be happy to assist you in compiling all these documents according to the requirements of your financier.
Yes, as a rule, borrowers who wish to realise private property financing via a financial institution must contribute a proportion of equity to the project. This amount is usually around 20 per cent of the target loan volume, so that the remaining 80 per cent is covered by the loan. The individual equity share can vary depending on the financing partner. If there is a particularly good relationship between lender and borrower, 100 per cent financing is also conceivable. The monthly interest charge varies depending on the model.
Depending on the type of financing and the corresponding financier, the costs for private property financing can vary greatly. The biggest cost factor is usually the monthly interest repayment costs. The interest rate varies depending on various factors, such as the borrower's creditworthiness, the value of the property or the amount of equity. It is worth comparing different offers here.
The responsible financier will check various aspects before approving private property financing. These include the value of the property, the borrower's creditworthiness, income, any Schufa entries and the need for collateral. With our support, we prepare all relevant documents professionally, transparently and cleanly so that there is no doubt about the accuracy and legitimacy of your loan application, even after intensive scrutiny.
If borrowers opt for private property financing with fixed interest rates, they have the certainty that the contractual interest rates will not increase within the contractually agreed fixed interest rate period. Such an agreement is particularly worthwhile in times of low interest rates. On the other hand, borrowers do not benefit from any further falls in interest rates. At the same time, many such loans are linked to binding terms and cannot be repaid early.
Finanzierung.com finds the right property financier for you
Our aim is to provide entrepreneurs with quick access to favourable financing. To achieve this, we work independently and advise each entrepreneur individually.
We have been in the market for you for 20 years. As entrepreneurs like you, we know exactly what companies and the self-employed need in all financing matters.
Finanzierung.com will always provide you with a personal advisor. No call centers, no queues. You can also visit us in person at our offices in Munich City Center.
Thanks to our long-standing relationships with financiers and our high financing volume, we receive unique conditions, which are passed on to you.