Every consumer knows them – the terms and conditions, which are agreed in the context of sales contracts and which are usually more or less understandable. Legal transactions – regardless of their nature – are generally based on the general conditions outlined here.
And the call from the building loan is also embedded in the loan terms.
How important are they for a home loan?
What exactly is in the general loan terms ?
If you do not want to experience a surprise when it comes to mortgage lending, you must read and understand the loan terms.
Building loan – how far can the bank go?
In this country, the general loan conditions are part of every loan granted. As a rule, the banks here are based on regulations on contract law (derived from the Civil Code) or the highest judicial decisions.
However, the general loan terms for building loans should not be confused with the individual loan terms that banks grant to the borrower – in the sense of:
- interest rate
- individual repayment or
- Running time.
Rather, this is a framework for the business relationship between the bank and the building owner. The financing terms therefore contain information:
- for dealing with collateral
- to claims for assignment
- about the way in which conditions are adjusted or
- for premature replacement and
- about the non-acceptance compensation.
This means that the general loan conditions are the basis on which the mortgage loan is sufficient.
- Even if the general credit conditions have no influence on the interest rate or the amount of the repayment itself – each builder must carefully examine the conditions of the bank in order to avoid controversial clauses that can become boomerang during the term.
Real estate financing – check all conditions
Of course, loan terms are only a small part of those aspects that a prospective homeowner needs to keep an eye on. With regard to the flexible repayment of building money, individual framework conditions count.
We are not talking about the borrowing rate here. Rather, it’s about making the loan repayment as consumer-friendly as possible. For example, where households can regularly expect special payments from the employer, home financing should include an option for special repayment.
At the same time, every consumer has scope for the repayment amount in order to use the shortest possible way to debt out home ownership. Only when all the points are right can you face cheap and solid home finance.