Real Estate Loan Despite Debt

Mortgage loan despite debt and thus has no more debt at an earlier date. Your advantage with a real estate loan to optimize your personal finances:… “However, any overdraft should be avoided – nowhere near as good and you have difficulty repaying the mortgage loan installment agreed with the bank. Further illustration at

Demands for a home purchase

Demands for a home purchase

Over the years, everything goes well, the loan installments are repaid in time and the desired time target, in the old age in the paid apartment to stay, seems feasible. You may soon find something new, but the client is not paying well and you have problems replacing the installment plan agreed with the house bank for the real estate loan.

Develop solutions for your personal and business problems and manage them in your debt crisis. Even if your property is in danger due to payment problems, there may still be ways and means of overcoming the debt crisis.

As part of the advisory process, we assist you in the active engagement with your life situation, in which you regain control and personal responsibility for your financial affairs.

There is a widespread belief that real estate loans are debt and that they have to be repaid as soon as possible. What are real bad debt losses? For example, if you have a consumer credit, you are in debt. As long as you can still pay them loose, they are actually not debts, but you can …..

So debt in the real sense is just loans

So debt in the real sense is just loans

That you have taken out because you live beyond your means. You also have debt (or can get it) if you have acquired something on credit that was either too high or surprising – or is gradually losing importance. Debt also arises due to the credit bubble …..

In 2008, the real estate credit bubble broke out in the USA because the buildings were only refinanced with falling interest rates for a short time (1 year fixed interest period). “The” Squeeze Columns “went from apartment to apartment, persuading people to pay off a lot more because the property seemed to be gaining in value, and all of a sudden the real estate owners suddenly had the capital they needed quickly spend again – but for beautiful cars and other consumption.

The too-high demand for supply – too little need – the land prices fell massively. Many people have lost their homes to the banks – the banks have sold the bad loans in opaque packages that were offered as a bargain – many banks – also Europe-wide, also German and tax-financed – have felt the big business and these packages with these many Bad Loans bought – we know the rest – the main payers had to pay for it – that still works today …..

To what extent is the likelihood that a real estate bubble will develop in Germany? In Germany too, people often talk about the threat posed by a real estate catastrophe. For some time now we have and will have an increased demand for real estate – I mean Berlin, Potsdam and the closer and wider environment as well as other big cities and middle classes.

However, because the real estate financing in Germany differs significantly from those in the US or other countries (eg Spain), we are far from a real estate crisis or even a bubble. Banks continue to set a real mortgage lending value – despite higher real estate tax. If someone wants to buy a property on a heel, and this property seems too expensive for the house bank, then either more capital must be raised or you do not get the loan.

Because 99% of the properties in Germany are permanently collateralized – in addition, many financing transactions are secured – even short-term interest rate increases – at least for the secured properties – are no hurdles. Even if interest rates rise after the fixed interest rate, credit institutions have already checked their credit checks to see if the property can still be financed – otherwise, there is no receipt.

Who can not pay the real estate up to a certain age

Who can not pay the real estate up to a certain age

Which has only very much merit? Meanwhile, this is somewhat relaxed and adapted to the circumstances – if the residual debt and the resulting monthly payments are not so high, then a loan is possible even in old age.

So if a property in Germany is co-financed by the lenders, then this is very likely to be quite reliable – exceptional cases reinforce the scheme. Why are real estate loans usually not bad debt in practice? In fact, it can be said that loans to acquire property are hardly bad debt losses, regardless of whether the property itself is used or rented.

The main reason for this is that a property has a very real added value – strictly speaking, there are two values. This is the actual real value of the property + the housing costs. For owner-occupiers, you use the housing value yourself (you no longer pay rents). With a rented property, you have paid the rental value by asking the tenant to pay the rental fee.

This already shows that a subsidized property is not a debt object, but still gives something away (by the housing value). The decisive factor is that you have a high priority when purchasing – this value also reduces a corresponding amount – and finance themselves mostly with it.

It only pays off as much as necessary 

It only pays off as much as necessary 

The balance that you claim from your investments (eg a property). Wealthy people do not even think they have debts. They would not even think about a faster relief of the property through special repayment. They would rather buy another property from the remaining capital.

In most cases, a home should be paid until the time of retirement, especially if it is the only property you own. But it is also possible that you have to settle a remaining debt in old age, for example, because the property was purchased relatively late. A big risk when buying a property on credit is that you take overbuy or build an oversized property, or find yourself in a place you simply can not afford in the long run.

If you have previously saved (eg for the equity capital), then you can also partially expect this “previous” course if you leave something behind, eg for provisions and repairs. In general, these difficulties can also occur differently – even without their own property and even then you have to respond to it and change if necessary.

Therefore, it is important that the property always has a higher market value than the residual debt of the bonds. For example, if a person alone can not own the property, the last resort should always be to ensure that the property can be sold in peace. Assessment: If you can do it without debt and if possible with a more or less large loan from the property, then you do not have much to complain about.