If you want to finance a property, you should prepare well for a consultation. An investigation by "Finanztest" shows that offers from financial institutions cannot always be trusted blindly.
When it comes to financing a property, banks and credit brokers are the first port of call for most people. That's where the money and the expertise are - at least that's what you'd think. But even financing professionals can make a mistake, according to a study by the magazine "Finanztest" (issue 2/2023).
The advice and loan offers of 19 regional and national banks and credit brokers were evaluated. In at least 6 test cases each, the consultants should determine the ideal financing offer for the respective tester. The result was sobering. Only 4 of the 19 institutes tested impressed with the grade "good". 14 others did not get more than the rating "satisfactory", one provider even only received the grade "sufficient".
In the study, the test subjects, aged between 28 and 48, stated that they wanted to buy an apartment for their own use together with their spouse. Purchase price of the property: between 350,000 and 750,000 euros - depending on the region. Around 15 percent of the purchase price and all ancillary costs could be covered with the equity from overnight and fixed-term deposits, equity funds, government bonds and a parental subsidy.
Sparda-Bank Baden-Württemberg was the test winner (grade 2.1), followed by Hypovereinsbank (2.3). Both convinced in the test cases with well-suited financing concepts on good terms. Third and fourth place went to the credit broker Interhyp (2.4) and Dr. Small (2.5).
The providers that were rated "satisfactory" or worse failed at various points. Sometimes the loan would not have been enough to finance the house purchase, sometimes the loan was too generous, sometimes the customers simply could not afford the loan installments with their income and expenses. Loans that were too expensive were also included.
“Finanztest” therefore advises you to prepare well for a consultation. Those who want to build should know exactly how much equity they can use and what the amount of the loan must be. They should also have a list of all income and expenses to know how much money is left to pay off the loan installments each month. You should know how much money you make from irregular income, with which possible special repayments are possible. And they should roughly know the market interest rate level.
For advice, it is best for customers to specifically ask for a specialist in construction financing. If you don't understand something, you should ask. In addition, those who want to build should not sign the first offer that comes along. Better: Obtain and compare at least two different offers from different institutes. And very important before signing a construction or purchase contract: The bank's financing commitment should be available at this point at the latest.
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(This article was first published on Tuesday, January 17, 2023.)
