Low interest rate also makes building savings attractive
Could better the time to borrow for building owners and property buyers are hardly. Although like the mortgage interest rates in recent weeks have increased somewhat, but all in all, they are still at a very low level. Accordingly, it is possible to finance real estate cheaply. Even with a smaller income, it is feasible to tackle on funding secure or repay the loan within a reasonable period of time.
Thursday, December 2, 2010
pay off loans real estate best: After the windfall
There are things that are not predicted and certainly can not plan. These include among others the heirs. It has happened many times before that so many have inherited quite surprising, and thus was hit by a windfall, who was simply not scheduled. But even winning the lottery may be reason for a sudden large amount of money is available, was not expected in the run-up.
Especially the succession occurs more frequently than is assumed. In practice, it often planned to use the inherited money to repay the existing real estate financing. However, this is often easier said than done because most loans are tied to a fixed interest rate and therefore can not be removed without further notice.
Of course it would be possible to make contact with the Bank and seriously negotiate an early loan repayment. Who wants to be debt free as quickly as possible, can look for such a conversation with the bank manager. From a financial point of view this approach is generally not recommended. The problem is that lenders are in such cases is almost always to the right to charge a so-called early termination. In this way there would be a huge additional burden: the repayment amount would significantly exceed the instantaneous amount of debt outstanding. Depending on the fixed interest rate or maturity and the current interest rate situation, the possibility that the Bank calculates a very high penalty and, for example, a five-figure sum in compensation (which is levied in addition to the outstanding debt) calls.
Only at short maturities or relatively low amounts of outstanding debt it makes sense to think seriously about this path. Otherwise it is better from a financial point of view, to switch to other strategies. Especially as the Bank do not agree to an early redemption must necessarily - perhaps the bank wants to retain the originally agreed term.
Therefore, in practice, usually the contrary. In the second part of this review series is to show what opportunities still exist, in order to break away from real estate loans and debt to be faster.
Especially the succession occurs more frequently than is assumed. In practice, it often planned to use the inherited money to repay the existing real estate financing. However, this is often easier said than done because most loans are tied to a fixed interest rate and therefore can not be removed without further notice.
Of course it would be possible to make contact with the Bank and seriously negotiate an early loan repayment. Who wants to be debt free as quickly as possible, can look for such a conversation with the bank manager. From a financial point of view this approach is generally not recommended. The problem is that lenders are in such cases is almost always to the right to charge a so-called early termination. In this way there would be a huge additional burden: the repayment amount would significantly exceed the instantaneous amount of debt outstanding. Depending on the fixed interest rate or maturity and the current interest rate situation, the possibility that the Bank calculates a very high penalty and, for example, a five-figure sum in compensation (which is levied in addition to the outstanding debt) calls.
Only at short maturities or relatively low amounts of outstanding debt it makes sense to think seriously about this path. Otherwise it is better from a financial point of view, to switch to other strategies. Especially as the Bank do not agree to an early redemption must necessarily - perhaps the bank wants to retain the originally agreed term.
Therefore, in practice, usually the contrary. In the second part of this review series is to show what opportunities still exist, in order to break away from real estate loans and debt to be faster.
Sunday, August 15, 2010
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