You've been dreaming of building a house or buying an apartment for a long time, and you're finally on the verge of making that dream come true – if only it weren't for the myriad of financing options you're faced with even at the first exploratory stage. But don't worry: In the following article, we'll explain how you can keep an eye on your financial options and make a well-founded comparison of the almost unmanageable number of offers.
Buy or rent? – The question of principle
But one thing at a time. Before you get serious about financing your home, you need to answer two basic questions: First, are you really willing to go into debt to buy a home, or are you more of a fan of the flexibility that comes with renting?? Secondly, what would be affordable for you if you were to change your current or. would invest a potential monthly rent in a real estate loan?
Construction financing with credit.
If you decide to buy, the next step is to clarify whether you can expect to get a loan at all. To be considered as a borrower, you should be able to provide proof of a regular income during the past twelve months. If you are self-employed, it is advisable to be able to prove that you have at least one tax return.
In addition, it is necessary to clarify what is the maximum amount of own funds you can spend. At present it is usual to cover at least 20% of the financing costs with equity capital – this corresponds approximately to the additional costs of the real estate purchase. However, if you have at least 30% of the purchase price in your own funds and a sufficiently high income, you should not encounter too many obstacles when applying for a loan.
We also advise you to make use of your annual right to free information at the Kreditschutzverband (KSV). This collects information about the payment behavior of private individuals and thus provides lenders with a data basis for assessing your creditworthiness. Unfortunately, it often happens that a loan is denied due to a single negative note.
Budget calculation: What rate can I afford?
To estimate the maximum monthly payment you can afford, here's how: Subtract your fixed costs from your monthly income, as well as the anticipated operating costs of the new property, to arrive at the amount of income you have freely available for monthly repayment.
But beware: To minimize risk, the bank you apply to for the loan won't assume interest rates are currently low. Banks rather count on an interest rate of, for example, 4% per year when granting loans, even if the interest rates are much lower at the time of the conclusion of the contract. If you decide to take out a loan with variable interest rates or only a temporary fixed interest rate, you should consequently make sure that you can still afford the monthly payment even if interest rates rise – possibly significantly. Note that a variable interest rate is usually more favorable overall, but a fixed interest rate offers you greater planning security.
Who can help me compare loan offers?
Quite simply: miracl! Based on your budget calculation and the corresponding proof of income, we will obtain suitable offers from different credit institutions and help you find the right one for you from the different types of loans. Subsequently, we support you in concluding a contract with which you are completely satisfied.
Which costs do I have to consider?
Before signing the contract, you should get a detailed overview of all the costs that will be incurred in addition to the purchase price. This includes u.a. the land transfer tax, the broker's commission, the fee for the land registration and the fee for the notary who draws up the purchase contract. You can find detailed information on the amount of the respective costs in our article on ancillary purchase costs for real estate or property purchases. Purchase of land. In this context, it is also advisable to find out what fees are payable in the event of early repayment – for example, if you decide to restructure your debt.
How does the repayment of the loan work??
In this context, it is important to note that real estate loans in Austria are usually paid off according to the annuity loan model. This means that although the monthly installments remain the same, the ratio of interest to the actual repayment rate (the amortization) changes over the term: While the share of interest decreases, the share of repayment increases. The annuity can be calculated with the following formula:
Finally, you should consider the possibility of so-called unscheduled repayments – d.h. additional partial repayments that you agree with your bank and that can help you to influence the repayment rate of your loan. A maximum of 10 000 euros you can repay in Austria free of charge in the form of an unscheduled repayment.