To invest in real estate, you need a lot of money. Fortunately, there are several ways to get that money. The classic mortgage loan is the best-known way to finance real estate, but you can also look further. After all, there are still several alternatives, which – depending on your situation – may be better for you.
If you buy a new home, or if you want to renovate existing real estate, it is usually interesting to take out a loan. But which loans are there? Check stindt law forgetting your real estate financing.
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Mortgage loan
The best-known option is the mortgage loan, where you take out a mortgage for your new property. But before you can get that loan, the bank will investigate whether you can properly repay the requested amount each month. In doing so, they take into account, among other things, your income, other loans, the financial reserves you have and – certainly with a second home – the percentage of the purchase amount that you want to borrow.
If you buy a house to rent out, the bank also takes (a part of) your rental income into account, at least if you can demonstrate that it will come in regularly. That in turn depends on location, price, size and condition of the property.
Reinstatement of capital
One of those options for financing real estate is the reinstatement of capital. This means that you withdraw capital from an already existing loan. For example, if you have paid for your family home with a mortgage loan, and it has almost been repaid, you can borrow the repaid capital again, at the current interest rates.
The advantage? You do not have to go to the notary again to establish a mortgage. A reinstatement of capital is possible as long as the mortgage on your home is running, and that period is fixed at thirty years. The disadvantage? The mortgage is on your own family home, and not on your investment property. In the worst case, the family home can be sold, although that rarely happens.
Bullet credit: a group insurance or share portfolio
If you already have enough capital, a bullet loan is also a possibility. You only pay interest until the term has expired . Only then do you pay off the entire capital. In order to obtain such a loan, you must be able to demonstrate that you will be able to repay it when the time comes. For example, because you expect the payment of bonds or because you have a group insurance policy, in which you have already saved a considerable amount that will be released when you retire.
Renovation or energy loan
If one of your properties needs refurbishment, you can also finance those costs in various ways. You can choose to include the renovation costs in your home loan, or you can take out a separate renovation loan. A separate loan is more flexible: there is no notary involved, no guarantee is required and it is easier to take out. But of course the interest rate is higher that way. If you borrow for green investments, you can often get a lower interest rate from the bank Learn More
