The amount of the own contribution depends on the quality of the property to be financed. This includes the type of property and the valued market value in the rented state. For example, you can attract more financing when financing a home for renting than a commercial property for renting. In addition, the level of own contribution differs between the financiers. The financing policy of the banks differs. For example, there are banks that do not finance commercial real estate at all or that do not require repayment. For the Property finance and development this is important.
The Common Factors
The most common form of a mortgage on an investment property is a linear or annuity loan in combination with a fixed interest rate. It is almost always necessary to pay off on real estate financing for an investment property. In addition, there are some financiers who also finance part or all interest-only payments. This strongly depends on the appraised market value of the object. As a rule, between 2% and 5% must be repaid on the remainder. Due to the historically low mortgage interest rate, many of our customers opt for a fixed-rate period of 5 to 10 years. You have already been borrowing for 2.2 years for 2.2% – 2.75% and a 10-year interest rate for 2.75% – 3.2%. This depends on the type of property, the valued market value and the financier. For the best of PFD this is important now.
Why invest in real estate?
By investing in real estate you create added value on your freely investable assets. For a small investor it is not possible to influence the performance of a share on the stock exchange. As the owner of an investment property you can ensure that your influence will improve the return. In case of Property development loans this is important now.
Investing in real estate pays
It will not be the first time that someone invests € 50,000 in a pension or investment fund and that ten years later his investment is still the same or has even fallen. If, on the other hand, you invest € 50,000 in real estate, then the property is guaranteed to be worth more with an average increase of 3 to 6%. The value of a house is determined by the working hours, raw materials, materials and soil scarcity when you have to pay more ten years later to build the same house, the value of the property increases automatically compared to equities, both the price and the rental income of real estate increase over time and that even during the inflation period.
Real estate protects against inflation
That cannot be said of equities. Real estate prices only fall temporarily during recessions, high unemployment and oversupply. Usually this is after a period of high rise.