Construction financing: Anyone who wants to apply for a loan, whether it is a construction loan or an ordinary small loan, must meet some requirements so that the loan can also be granted. We have compiled and explained the most important factors below. There must be special requirements for the personal conditions, the creditworthiness must be sufficient, the income must be sufficient after deduction of the necessary living expenses and the burden that arises from the financing must be bearable.
Who would like to take up in the Federal Republic of Germany a credit, must fulfill first of all a personal basic condition, it must be namely fully legally competent. In Germany, you can only take out a mortgage or a loan once you have reached the age of 18. The loan must be taken out before the age of 60 (§ 104, 106 BGB). Full legal capacity also means that the loan applicant is not under guardianship or care.
Beside the completion of the 18. In addition to the age limit, a high age may also be an obstacle to the granting of a loan. Especially for long-term loans, such as e.B. a construction financing or a mortgage loan, it becomes for persons, who are already over 60 years old, already quite difficult with the credit admission. With a 70 year old applicant, there are hardly any financial institutions that will play along with granting a loan.
The third point of the personal requirements is that the applicant has his permanent residence in the Federal Republic of Germany, i.e. is also registered in Germany. The same applies to prospective credit applicants from Switzerland or Austria, who must also be registered in their home country.
A bank account with a current account in Germany is also required if the loan is applied for in the Federal Republic of Germany. The current account does not necessarily have to be held at the credit institution where the loan application is made.
As a final personal prerequisite, it must be ensured that the borrower is acting on his own account and not on behalf of a third party. The borrower must use the loan taken out for his own purposes and be able to pay for the loan costs.
The creditworthiness of the loan applicant is of decisive importance for the decision on the loan itself and the amount of interest to be paid. With the computation of the creditworthiness the financing institute wants to attain security over it whether the customer will be presumably able to repay the credit punctually and completely, the creditworthiness reflects its economic efficiency. Nowadays, in addition to the Schufa information, the Schufa scoring is generally used, which is used again and again in spite of many false results.
Negative entries in the Schufa are credit rating characteristics that will always affect the credit check. If there is a deviant payment history on previous or current loans, and even loan cancellations and account terminations, the process is over at almost all institutions.
Statutory declarations in lieu of an oath, today also referred to as submission of a list of assets, as well as consumer insolvency usually make it impossible to take out a loan. The degree of indebtedness is also another criterion in the requirements for granting a loan, especially in the case of construction loans.
In the case of an applicant who has already taken out loans in the past, the bank will also take a look at the previous payment history when checking the loan. If payments have always been made on time and loans have already been paid off, this can also be a positive factor in the Schufa report.
The basic income requirements for granting a loan are generally only met if the applicant has regular income, such as wages, salaries, benefits or a pension. BaföG payments or other regular public support are usually not taken into account when calculating income, but child benefit is.
Hartz IV recipients have no chance of getting a loan, as their income is below the so-called garnishment exemption limit. By the way, this also applies to many employees in Germany who work within the minimum wage range and then, in some cases, do not exceed the garnishment exemption limit with their monthly income, even though they work full time.
When considering the necessary income of a loan applicant, the type and duration of the employment relationship is also taken as a basis in the case of salaried employees. It makes a difference whether the employee is in a permanent or temporary employment relationship or even still in the probationary period. Employees with a permanent employment relationship must generally have been employed by your current employer for at least six months. In the case of a fixed-term employment relationship, a loan application only has a chance of being approved if the duration of the employment contract at least corresponds to the loan term applied for.
Income must be verified by pay stubs u.ä. To be proven. In addition, some credit institutions also require the submission of account statements in order to check the ratio of cash inflows and outflows and compare them with the information provided.
Special rules apply to self-employed persons regarding the proof of their income. Some institutions do not grant loans to self-employed persons. In these and other more difficult cases, it is certainly a good solution to look for special providers on the Internet. Here the portal https://www offers itself.flash loans.com/ with different approaches.
Necessary living expenses / resilience
On the basis of the submitted proof of income, the financing institution will usually prepare a budget comparing income on the one hand and expenses on the other hand. Only if this comparison shows that sufficient financial means are available for the loan repayment, i.e. the acceptable burden is sufficient, the loan application can be approved. Exception, the income is below the garnishment exemption limit (s.o.)
As an average value for the calculation of expenses, 450 euros per month for the first person and 200 euros per month for each additional person are taken as the minimum cost of living. For each vehicle, another 150 euros in costs are added. This is only an approximation, as each banking institution sets its own flat rates.
Documents and records
Before a loan can be concluded, the borrower must prove his or her identity. The legitimation procedure for loans applied for via the Internet is usually carried out at the post office, using the so-called Post-Ident procedure. When applying for a loan at a bank or savings bank branch, the identity card or passport is the proof of legitimacy.