Tips to Reduce Home Loan Interest Rates In Germany | #GermanRealEstate #RealEstate #GermanMortgage — Transcript

Full transcript

1. 0:00when it comes down to real estate
2. 0:02financing we often deal with significant
3. 0:04amounts and a very small saving can have
4. 0:07a huge impact on interest payments in
5. 0:10this video I'll reveal some clever
6. 0:12tricks to help you save big bucks on
7. 0:13your mortgage hi my name is AJ and in
8. 0:16this channel we'll guide you how to buy
9. 0:18a house here in
10. 0:21[Music]
11. 0:28Germany
12. 0:32[Music]
13. 0:35as you probably know the more own Equity
14. 0:37you bring into your financing the lower
15. 0:39the risk for the bank and hence the
16. 0:41lower your interest rate but here's
17. 0:43something you might not know not all
18. 0:45banks have a smooth transition in rates
19. 0:47take H fbank for example they have a
20. 0:50gradual shift each th000 will decrease
21. 0:53your interest rate not by much but
22. 0:55nonetheless they'll
23. 0:57decrease on the other hand there are a
24. 1:00lot of banks which have internal
25. 1:01criteria and have defined loan to value
26. 1:04thresholds loan to value means how much
27. 1:07loan are you taking from the bank versus
28. 1:09what is the property worth in most cases
29. 1:12that translates to what's the purchase
30. 1:14price so loan divided by purchase
31. 1:18price so if you're buying a 500K house
32. 1:21and you only need 400k as a loan we
33. 1:23speak about a 80% loan to
34. 1:26value each 5% more own Equity will lead
35. 1:30to a different interest rate in that
36. 1:31case 100% 95 90 and so on so sometimes I
37. 1:37push my clients to pitch in two or 3,000
38. 1:40more own Equity to fall below that
39. 1:43threshold so that they can get a better
40. 1:45rate for their
41. 1:47mortgage and looking at the fact that
42. 1:49most clients fix the interest rates for
43. 1:5110 15 or even 20 years that's a huge
44. 1:55amount of money to be saved across that
45. 1:57duration so if you're looking at at a
46. 2:00home loan contract please check wi with
47. 2:02your advisor proactively whether the
48. 2:05change of own Equity by a couple of
49. 2:07thousand EUR makes sense because the
50. 2:08interest rates then will be
51. 2:12reduced now let's talk about existing
52. 2:15properties after buying there's often a
53. 2:18need for modernization inform your bank
54. 2:20about planed modernization during the
55. 2:22application process because some
56. 2:25modernizations can be seen as value
57. 2:27adding by the bank potentially leading
58. 2:29to a better interest rate make sure you
59. 2:32discuss this with your bank or financial
60. 2:34advisor up front beware the bank's
61. 2:37differen ship between renovation and
62. 2:39modernization Renovations are things
63. 2:41like painting wallpaper flooring Etc
64. 2:44they'll not be increasing the value from
65. 2:45A bank's perspective on the other hand
66. 2:49modernization like changing bathrooms
67. 2:51exchanging the windows adding an extra
68. 2:54room Etc these will be adding value to
69. 2:56the house and hence also decrease the
70. 2:58loan to value value fact in your favor
71. 3:00we've learned what that is earlier
72. 3:04on for those opting for new construction
73. 3:07consider the magic word igone or Sweat
74. 3:11Equity doing certain tasks yourself like
75. 3:14painting or laying the floor can
76. 3:16significantly reduce the cost your labor
77. 3:19is considered as Equity by some banks
78. 3:22leading to potential interest rate
79. 3:24reductions this is one reason why
80. 3:26Builders typically have the painting and
81. 3:28flooring as a separate line item in the
82. 3:30construction cost of course discuss
83. 3:33these plans with the banks beforehand to
84. 3:35ensure they accept your proposed level
85. 3:38of self-c contributed work some banks
86. 3:41may ask for experience in that field of
87. 3:42work they just want to ensure that
88. 3:45whoever is doing the work actually knows
89. 3:47what he's doing so if you're intending
90. 3:49to do this please don't overestimate
91. 3:52your Knowledge and Skills YouTube videos
92. 3:54may not teach you what you actually need
93. 3:57if in doubt get it done by a
94. 3:59professional
95. 4:02don't rely solely on your house Bank
96. 4:04even if you've been a loyal customer for
97. 4:06decades shop around get quotes from a
98. 4:09different bank or consider using a
99. 4:11specialized homeown consultant like us
100. 4:13they can help you find the best deal
101. 4:15tailored to your needs it's worth the
102. 4:17effort and in most cases these services
103. 4:20are free of charge as advises are
104. 4:22compensated by the Banks they'll be
105. 4:24connected to hundreds of Banks and have
106. 4:26an overview whether the bank will
107. 4:27finance you or not good Homeland
108. 4:30Consultants will guide you through the
109. 4:31process from A to Z anyways I hope these
110. 4:34tips help you save on your real estate
111. 4:36financing if you're looking for
112. 4:38personalized advice on your financing
113. 4:40feel free to reach out to us until next
114. 4:42time and take
115. 4:45[Music]
116. 4:55care