On this page we have compiled all the decisive information about full financing. We explain how a house or apartment purchase can be financed at up to 110 percent. With our calculator we help you to check the feasibility. Here you can calculate your house purchase. In addition, the appropriate financing offer is determined on request.
- You choose the type of financing – whether for new construction, real estate purchase, debt restructuring or forward loan – and provide information on the costs incurred and, if applicable, equity capital / personal contributions.
- After that, enter the key data of your income, revenue and expenditure situation.
- On the basis of your information we calculate the financial feasibility of your project and your personal comparison will be made – free of charge and without obligation
Financing a house or apartment without equity
Savings are not a prerequisite to buy a house or apartment. Many homebuyers are approved for financing despite their lack of equity. However, construction financing without equity needs to be well prepared.
Importance of equity in construction financing
Of course, if possible, you should use your own capital to finance the house. There are two reasons for this.
Reduced need for financing: the more own funds flow into financing, the lower the need for borrowed capital. A reduced loan amount in turn leads to lower interest costs.
Requirement of banks: there are still banks that do not offer full financing and therefore insist on the use of equity capital.
The reason for this is the financial risk. In this context, people like to talk about the 80 percent limit. In fact, it used to be that most financial institutions financed a maximum of 80 percent of the purchase price. Today the situation is different, the equity ratio does not necessarily have to be 20 percent or more. Many people can finance in full, covering the purchase price or even more costs with the mortgage loan.
Tip: equity can be contributed not only in monetary form. Some banks also charge own services. These are also known under the term muskelhypothek. This refers to the labor costs of construction or modernization work that the homebuyer saves by doing it himself. However, it should be remembered that many financial institutions only half of the personal contributions to credit. Then the difference is to be covered by equity or it is financed.
Full financing – what banks mean by this
Homebuyers and banks define the term full financing differently. Buyers think they can cover all the costs of buying the property with the real estate loan. However, banks often interpret this type of loan differently. In the following, we have provided three different definitions of a full or. Complete financing explained.
Variant 1: finance loan to 100 percent
The loan-to-value ratio (also known as the loan-to-value ratio) expresses the relationship between the loan amount and the value of the property. Some banks finance the mortgage lending value at 100 percent. However, when determining the mortgage lending value, a security discount (usually approx. 10 percent) on the made. Thus, equity is mandatory for this type of financing.
Example for the determination of the mortgage lending value
purchase price of the property: 240.000 euro
safety discount: 10 percent
mortgage lending value: 216.000 euro (calculation: 240.000 – 24.000)
Thus, despite 100 percent financing, the homebuyer would still have to pay 24.000 euro of your own capital.
Option 2: finance the entire purchase price
In this case, the actual purchase price is financed in full. However, even this form of complete financing has its pitfalls. The core problem is the ancillary acquisition costs. They remain unconsidered, d.H. The real estate buyer still has to invest his own capital.
110 percent financing
To solve this problem, selected monetary institutions offer 110 percent financing. Whether as a base value a possibly. Reduced mortgage lending value or the property price to be used depends on the financing offer. However, it is usually possible to finance the purchase price and incidental expenses. However, the additional costs are usually tightly calculated, d.H. A broker should not be involved if possible.
Overview: incidental costs in the purchase of real estate
- Real estate transfer tax: 3.5 to 6.5 percent (depending on the federal state)
- Notary and land registry: 1.5 percent (both combined)
- If applicable. Real estate agent: ca. 3 to 6 percent
Note: the basis of assessment in each case is the purchase price stated in the notarized agreement
Influence of equity on terms and conditions
The lower the loan, the more secure the financing from the bank's point of view. That's why equity is rewarded: the more equity you invest in construction financing, the better the terms.
At most banks, the top interest rate is available for equity investments of 40 percent or more. In other words, the loan-to-value ratio must not exceed 60 percent. At a value of 80 percent, standard conditions usually apply. If it is higher, if necessary. An interest rate premium due.
Because of this surcharge, some advisors recommend to stay away from full financing. However, this is a highly generalized statement. If you want to buy a house and finance it without equity, you have to check the conditions on an individual basis. In addition, the framework conditions are not to be disregarded.
Interest rate comparison: in any case, it is advisable to obtain a construction financing offer. It then checks how the interest rate offered compares with the usual mortgage rates on the market.
Market situation: the interest rate market also plays a major role. If he is in a low-interest phase, the fully financed property remains an option. Of course, savings could be made for a few more years. But market interest rates may rise, making subsequent financing comparatively more expensive.
Opportunity costs: if you don't live in your own home, you pay rent. Nevertheless, the monthly installment of a real estate financing without equity can be lower than the rent payment.
These banks offer construction financing without equity capital
It is not possible to make a general statement about which bank offers full financing or even 110 percent financing. Overall, however, the market has changed considerably in recent years. Due to increased competition, the range of financing options has become wider.
It is quite possible that regional banks, such as z.B. Volksbanks or savings banks agree to grant you a loan. Whether the best conditions are available can only be determined after a comparison with our home financing calculator. After all, there are now several direct banks that offer full financing at top conditions.
Comparison of conditions and feasibility
You can also use our comparison for real estate financing without equity capital. We will check your project and will be happy to submit you a customized construction financing offer.
Requirements for the loan commitment
Banks must be conscientious in granting their mortgage loans. Due to the residential real estate loan directive, they are legally obligated to carry out a meticulous credit check. The appraisal must show that the borrower is able to repay the loan safely now and in all probability also in the future.
As a result, the finances of each applicant must be carefully examined. The focus is on these key creditworthiness features:
- Income: there must be sustainable income.
- Liabilities: financial obligations must be manageable.
- Schufa: no negative entry, preferably a consistently positive credit history.
The bank prepares a budget statement, d.H. It determines income and expenses. Incidental housing costs, loan installments or maintenance obligations reduce the available income. After deducting these expenses, it must still be possible to safely spend the monthly installments. Double income earners usually have an easy time of it, because in the case of unemployment there is still another income. In addition, the financial leeway is usually greater.
The asset situation is also checked. Other assets (especially real estate assets) can improve the credit rating for the loan. However, liabilities are also calculated, e.G.B. Loan debt.
In addition, the property to be financed is very important. From the bank's point of view, it embodies the greatest security. It forms the countervalue to the loan and is secured by a land charge. The more attractive the property, the more likely it is that financing will be approved. Properties from foreclosures are sometimes viewed critically. It makes sense to seek the advice of an independent expert when looking for the right financing partner.
Tips for the financing commitment
The chances of obtaining home financing without equity can be improved with the following tips.
Procure equity capital
With a little luck, you don't have to save for a long time to build up some equity capital. In addition, it may be. It is possible to build up a small financial cushion, for example by selling or buying the car. A change to a smaller car takes place. Perhaps the parents are also willing to make a small gift and thus contribute equity capital to the real estate financing.
Especially since equity capital not only improves the prospects of a loan approval. A financial buffer is always good to cushion unexpected costs.
Check whether own contributions are possible
Depending on the project. The possibility of carrying out certain work themselves. With a little luck, a muscle mortgage can be obtained to improve the loan-to-value ratio.
Reducing ancillary acquisition costs
High additional costs that may. To be covered with equity capital could jeopardize the feasibility of the financing. There may be a way to reduce the ancillary acquisition costs. Who z.B. When buying a house, the kitchen can be deducted from the value of the property to reduce the real estate transfer tax. However, it is important to check whether and how this will affect the loan.
Thinking about follow-up financing
Many home buyers are only concerned with immediate feasibility. But they should also think about the future. This makes it all the more important to hedge against a possible rise in interest rates. Short fixed-interest periods may offer the prospect of low loan interest rates. But the follow-up financing is due all the sooner for it.
Particularly risky financing those who limit themselves only to the minimum repayment and a few years later continue their financing with high residual debt. It is possible to accelerate repayment by repaying the loan in full or at least by increasing the initial repayment. Likewise, a long fixed interest rate can be desirable.
Calculator for construction financing without equity capital
Often construction financing without equity is possible with several banks at once. With our calculator you come one big step closer to low-interest full financing. We check your project and show you which conditions are available.
The first step is a feasibility check. In the course of the financing check, your individually assigned financing advisor determines whether and with which banks financing can be obtained. He will also be happy to assist you in optimizing your financing. Small changes can lead to the bank giving a commitment or granting a better interest rate.
To access the best conditions, we obtain financing offers from more than 300 banks. If you wish, we can even check whether a kfw subsidy is possible and thus whether an attractive subsidy loan is available. All advice is independent, d.H. It is neutral and also free of charge. It goes without saying that we take into account the residential real estate loan directive.
Comparison of conditions and feasibility
You would like to buy a house or finance an apartment without equity capital? You can also use our calculator for home financing. We optimize your financing and are happy to submit a customized construction financing offer to you.