The mortgage loan is a form of loan. A property purchase can be financed through a mortgage loan. The right to a property is called a mortgage. A mortgage on a property is entered in the land register as security for the lender.
- The borrower can freely use the money from such a loan.
- Mortgage loan: Realizing the dream of a property
- Mortgage calculator for the exact calculation of the loan rates
Home loan only if there is a corresponding security against the financing. As a rule, this represents a mortgage. In Germany, this includes the mortgage, the mortgage and the pension debt.
For a long time, the mortgage was primarily used as collateral for mortgage lending. In the meantime, banks tend to resort to land charges. Ultimately, what you take in as a real estate buyer is a real estate loan that comes with security. How this security is managed can run as a mortgage or a mortgage.
Annuity loan guaranteed. The conditions for interest and repayment as well as the amount of the loan amount are irrelevant when granting the mortgage loan.
Comparison between mortgage loan and land charge
Compared to the land charge, the mortgage is much narrower. The latter is bound to the actual monetary claim. The land charge is different, which can also exist separately from the actual claim from a mortgage loan.
This is the difference to the land charge of a property: This can go to foreclosure without a previous lawsuit. However, these measures are only taken when the borrower (debtor) can no longer pay the loan installments and can no longer service the loan.
- The term mortgage loan does not play a special role for the actual lending.
The mortgages – i.e. the monthly payments to the bank – can be quickly calculated using computers. The mortgage calculator shows how much it is
- monthly installment to the bank
- Term for the mortgage loan
- the remaining debt in the end
for the borrower. You only need a few details for the mortgage calculator:
- how high the loan amount should be
- the target interest rate
- the amount of the repayment – that is, the repayment of the loan amount to the bank in percent
- expected term
Loan amount $ Annual interest rate % Redemption % running time Years Monthly Rate $ Term until full repayment Years Remaining debt $
A mortgage calculator helps you quickly calculate how high the mortgage for a real estate loan will be.
Debt can only be rescheduled if the contract for the current loan with the bank allows and allows this. In any case, early repayment will result in prepayment penalty. The amount of the prepayment penalty depends on the amount of the mortgage loan and the interest that will be lost for the bank until the end of the term.
- The borrower has to calculate exactly whether a debt rescheduling is worthwhile, because even with currently low interest rates, the prepayment penalty can be so high that a debt rescheduling is not worth it.
Requirements for a mortgage loan
- Submission of the loan documents (financing plan, extract from land register, land register, extract from property register, certified purchase contract)
- Entry of the mortgage in the land register
- Rank certificate (with early payment of the loan amount)
Before concluding the loan agreement, the bank will also check various things to ensure that the ownership structure is correct and the sum is secured by the property. It will therefore collect the following information:
- Inspection of the loan documents
- Carrying out a security assessment (mortgage lending value is estimated)
- Determination of the lending limit
- Information on the borrower’s credit rating
Advantages and disadvantages of mortgage loans
The advantages of such a loan are obvious:
- The borrower (debtor) has financial resources immediately
- Low interest due to low risk due to the security of the land register
- With clever financial planning, the monthly charges are kept within limits (fixed / variable interest can be selected, special payments are usually possible)
Borrowing money is known to be subject to conditions. To obtain a mortgage loan, the bank expects a mortgage to be entered on a property, house or apartment.
Disadvantages of a mortgage loan:
- Entry in the land register causes additional costs
- Reselling the property is often problematic
- The mortgage transfers the right to sell to the lender, who will use this option if the debtor can no longer repay the loan. In the worst case, this can mean the loss of the property.