Wrong follow-up loan costs borrowers three billion dollars. Connection loan the extension means of a Baukredites after the rate fixation. When buying a property, a loan from a bank is usually necessary for the majority of the purchase amount. This building loan is set for a maximum of ten-thirty years. If after this period there is still a residual debt, the borrower needs follow-up loans. This subsequently regulates the interest conditions for his building loan.
If you are looking for the cheapest and best follow-up loan, you should inform yourself in good time and not simply accept the extension offer of the previous bank. With the help of comparison offers or even a change of the credit provider, homeowners and apartment owners can save several thousand dollars. Even if the building loan will not expire in a few years, a forward loan can be used to secure the currently low-interest rates for future follow-up loans.
Follow-up loan at my Good Credit bank
Follow-up loan with the previous bank (prolongation) Extending a building loan with the previous bank is the most convenient, but usually the most expensive option for the borrower. The old conditions for follow-up loans are often simply adopted. For example, risk premiums are not canceled, even though they are long outdated.
Likewise, old contracts often lack the right to grant a special repayment, which should not be missing in any follow-up loan. Even without changing the bank, comparison offers can save money. The mere mention of wanting to conclude a follow-up loan for his building loan elsewhere increases the bank’s willingness to negotiate.
The bank will improve the interest rates for a good customer who has proven his creditworthiness over the years. In the event of a lack of creditworthiness, the bank can also refuse a follow-up loan, which it must notify the borrower three months before expiry.
Follow-up loan with a new bank
Follow-up loan with another bank (rescheduling) After the interest rate fixation for a building loan has expired, switching to another bank is possible and can lead to considerable savings. Internet banks in particular offer more favorable interest rates of up to one and a half percentage points.
The average saving potential is around 0.5 percent. With a remaining debt of, for example, 100,000 dollars, about 5,000 dollars could be saved. However, the cost of transferring a debt rescheduling is only around 300 dollars.
In addition to written processing, some banks even assume these costs. In general, in addition to a favorable interest rate, the timeframe, repayment rate and flexibility of the new construction loan should also be right for a follow-up loan. Nevertheless, before changing banks, it is always necessary to use several comparisons offers for a follow-up loan and, if necessary, to consult an independent broker.
Follow-up loan tip
Anyone who wants to benefit from the currently low-interest rates despite the existing construction loan should consider a forward loan. This means that a profitable follow-up loan for the future can be negotiated three years before the end of the fixed interest rate.
With the help of this “interest rate bet”, the borrower can protect himself against rising building interest rates by agreeing on interest rates that he uses on the due date. Banks usually have this form of follow- up loan paid with interest premiums of 0.03 to 0.07 percent per month.
The further away the time of follow-up loan is, the higher the costs. But there are banks that offer a forward loan with a lead time of up to 36 months without an interest premium. Since interest on a building loan is likely to rise again in the next few years, Good Finance advises concluding follow-up loans with a forward loan and high repayments.