Mortgage lending comparison
Comparison, checklist & important clues for you
the essentials in brief
- Mortgage lending is extremely complex and usually takes decades.
- For mortgage lending a comparison is important because small differences have a big impact.
- Avoid comparison charts on the internet because they are too general and have no meaning.
- Better: Comparisons about the big mortgage lenders like Dr. Ing. Small, Interhyp or DTW with personal advice.
- Think also of the construction costs.
Table of Contents
A property is still one of the most stable assets, as prices rise reliably. However, you will be dependent on mortgage lending. An apartment, a house or a construction site can afford the least of their savings. The repayment usually takes decades and must therefore be well thought out. For the mind games, a home loan comparison is helpful. However, there is good reason to conclude mortgage financing personally with a professional agent. Why this is so and what you have to pay special attention, you will learn in this article.
Why a comparison is worthwhile when it comes to mortgage lending
Mortgage lending is usually completed by six-figure sums. Anyone who relies on just one offer and does not compare is themselves guilty. Because even small differences in interest, maturity and repayment rate can cause huge differences in these sums of money. The most important measure here is the effective interest rate (or annual percentage rate). The lower it is, the less interest you have to pay.
The following example shows the difference between two loan offers with a total loan amount of 200,000 euros.
|comparison||Offer 1||Offer 2|
|Effective interest rate||1.81%||1.51%|
|Repayment / year||2%||2%|
|Monthly. rate||635 €||585 €|
|interest costs||56,089.18 €||47,074.51 €|
With a difference of just 0.3% in the APR, there will be EUR 9,014.67 more in interest costs. That means: small difference, big impact! How do you do a mortgage comparison best, we show you below.
Therefore, online comparison tables have no significance
On the Internet, there are many comparison charts, if you look once for “construction financing comparison”. Simply by entering the loan amount, term and repayment installments these comparisons want to provide suitable offers. What works well with a small installment loan, however, is completely different when it comes to mortgage lending: other factors play another very important role here.
These include, for example, income, employment, age, Schufa score, value and type of property, type of use and location of the property. Without this information, a correct and serious comparison is simply not possible. Therefore, you should avoid these online comparisons and compare directly right. How this works is shown in the next section.
Our recommendation: Compare about mortgage lenders
Go directly to one of the big mortgage lenders. There ALL relevant data will be recorded, you will be advised personally and then you will compare the offers (by phone or on site). The comparison is thus quite specifically tuned to you and realistic.
This does not cost you any money, because the mortgage lender only earns at the completion of mortgage lending (usually 1% of the loan amount).
So it’s perfectly legitimate to ask 2 or 3 mortgage lenders to compare the offers. We have compared the providers and recommend you specifically three providers who are absolutely serious and recommendable. They are active nationwide and work with the majority of banks and savings banks.
- Allfinanz broker specializing in mortgage lending
- Free and non-binding advice
- More than 300 financing partners (including savings banks and Volksbanks)
- Telephone advice and on site in over 200 branches
- Also advice at home with the customer possible
- Specializing in mortgage lending
- Free and non-binding advice
- more than 400 financing partners (including savings banks and Volksbanks)
- Telephone and on-site advice at more than 100 locations
- Specializing in mortgage lending
- Free and non-binding advice
- more than 300 financing partners (including savings banks and Volksbanks)
- Advice via telephone and online
This is how you prepare for an appointment
Inquire at a meeting exactly on the modalities of the interest rate, the fixed interest rate and all incidental costs. A competent mortgage lender should be able to present you his offers in detail and respond to any queries. Let’s explain you the second or third best offer. Consider not just a single consultant or intermediary to contact. For example, you could ask your house bank for their portfolio. This is usually more limited than that of a free agent, but there may also be favorable offers there. Of course, you can tell the adviser openly that you are catching up on other offers.
If your opponent knows that he is in competition with other providers, you may end up with something in your favor.
Early on you should find out how much the bank adviser or credit intermediary earns you. The approximate rule of thumb in such matters is that 1% of the loan amount is considered appropriate commission. From a volume of about 300,000 euros, a financial services provider should earn less than 1% on your mortgage lending. Since 2010, customers must be informed about such final commissions, the demand must therefore not be embarrassed. Be sure to get the most important facts and figures in writing. A record of the details of a financial advice is yours. Under no circumstances let yourself be put under time pressure, but think about all offers in detail. If you know someone in your private sphere who has experience with mortgages, please ask him for his opinion.
Additional costs and other funding opportunities
Should you have a property for self-use in mind, ask for possible combinations with a KfW loan. The KfW loan number 124, for example, promotes the construction or purchase of your home with a maximum of 50,000 euros. It is particularly cheap to have and can be combined with any standard mortgage loan. Depending on the state, you will have to pay a couple of extra work costs. These consist of about notary fees and taxes together. If a deal is made through a broker, it will be even more expensive. Here is an overview of the purchase costs, which can make up to 15% of the real estate price. It is advisable if you already have at least this amount and he does not count as part of your mortgage lending.
Also interesting for all families is the new construction costs. For each child, there can be an additional 12,000 euros in support from the state. You can find more about this in this detailed article.
Think of the Schufa in time
In Germany is generally looked at every credit on your Schufa score. This expresses your supposed creditworthiness. However, there are always wrong entries that can worsen your score. If that’s the case, you’ll automatically be penalized for a loan. Take care of it at an early stage by requesting your Schufa information for free. If you notice any inconsistencies, they can be deleted or corrected in advance of your mortgage lending. However, keep in mind that this procedure can last for several weeks.
These factors influence the interest rate
Especially in terms of interest rates, you get in a construction financing comparison on the Internet rather inaccurate information. An exact statement on the interest rate is only possible after a complex examination of your overall situation. Therefore, the personal consultation is necessary, which deals with your starting position. Online, on the other hand, you will always be presented with the lowest interest rate in the offers, which, however, can be significantly higher in reality. The following criteria have a significant impact on the size of the loan line:
Credit standing means creditworthiness. This includes primarily the Schufa-Scpre, but also age, gender or residential address play a role. The better your overall credit rating is, the lower your default risk is estimated. With a low risk, you can expect cheaper rates.
The current situation also contributes to the overall situation. A sure salary requires that you work indefinitely and have the probationary period behind you. How safe is your job, how long have you been in your job or what position do you hold? The more stable these factors seem to a lender, the more you benefit from them. Of course, the amount of your salary also plays a role.
As collateral can count everything that you can offer as a pledge. Such services also minimize your risk. If you can not pay off the loan, the bank will resort to it. Securities of any kind may be considered as security, but also mortgages or a guarantee. The more you cover your mortgage in this way, the lower the interest rate will be.
Mortgage lending has a clear purpose. The lender knows what you are using the loan for. Last but not least, real estate represents a stable equivalent. This factor contributes to your security. In the worst case, if you repay as a repayer, the bank may otherwise sell the home and get your money back. A safe use also brings you interest benefits.
Last but not least, your interest depends on the nature of the loan. The term, your monthly repayment installments, a possible fixed interest rate or the amount of your loan are decisive. For example, if the bank can plan longer with you, you may get a cheaper interest rate.
Always orient yourself by the effective interest rate
As with all other loans, you should be interested in mortgage lending only for the effective interest rate. This shows the actual costs for you. This includes administrative or closing fees as well as all other costs. The APR should ideally be guaranteed for as long as possible during mortgage lending. Such interest rate fixation gives you planning certainty and you keep the currently comparatively favorable interest rate level.
Step by step for mortgage lending
An acquire knowledge
Ermitteln Determine monthly repayment installment
Start thinking about which property you are dreaming about and the financial scope of your purchase. Stay realistic and remember that mortgage lending takes many years. Determine how much money you can spend monthly on a loan. Do you want to live or rent the property yourself? Determine your free disposable income that can be used safely and over the long term as a repayment installment. If you want to live in the property yourself, the current cold rent of your apartment is a first clue.
➂ Send request to mortgage lender
Ask one or more major mortgage lenders. We recommend Dr. Klein, Interhyp and DTW Real Estate Financing. In a personal conversation, all questions are clarified with the aim of being able to compare specific offers. Simple “comparisons” on the Internet have no significance and should be avoided directly.
➃ Compare offers
If possible, do not leave it alone in a single financing interview. Compare rather too often than once too little. You can also visit your house bank and get an offer there. Personal consultations are essential in the context of mortgage lending. They should always be kept detailed and open. Remember that you will be in debt long term and especially high. Credit and basic conditions must suit you optimally.
Prüfen Check loan collateral
Inquire about possible security benefits that improve your starting position. Raise equity and ask questions as soon as something does not seem immediately obvious to you. Insist on a consultation protocol of your appointment. Pay attention also to the amount of the placement commission. If you are pressured or suspicious, you should change the consultant or completely avoid the company.
Zusammen Collect documents
As soon as you come closer to the successful mortgage lending, you should have all the documents together. What exactly is needed, you will learn from your advisor. Do not waste time at this point to make the process run on time.
Ein Get a second opinion
Before signing for the loan, you should get at least a second opinion. Ask in the circle of acquaintances or your family. In addition to another opinion, you can also benefit from the experiences that others have made. Ultimately, only decide if you have slept well enough and are absolutely sure.
Checklist: Mortgage lending
Interaction: term, interest charge, repayment installment
Loans always work the same way: You borrow money and have to pay extra interest. The cheapest way to get away with mortgage lending is to repay them as soon as possible. For this, however, you have to accept a higher repayment installment. Interest usually rises moderately with the duration of the term. What means a lesser financial burden for you in the month, brings your bank in the long run more profit at the credit business. The 3 factors repayment rate, term and interest rate thus influence each other. Always keep in mind that you are not accepting your obligations. In case of doubt you should rather accept the additional costs, which bring a longer repayment period. By doing so, you can ensure your quality of life by not having to constantly pay attention to the money and create reserves.
- Short repayment period -> high monthly payments, lower interest charges
- Long repayment period -> low monthly payments, higher interest charges
A construction financing comparison is for first guideline values, but has no great significance for you. It is important that you agree on a personal consultation with one of the major mortgage lenders and after comparing all the data you receive concrete offers that you can then compare. Take enough time and do not decide too fast. With our checklist you can also go through the offers and see if you have thought of everything. Only if you are absolutely sure in the end, you should choose an offer. Remember, you probably only make such a far-reaching decision once in a lifetime.
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