Residential Homes

Attractive financing options for property purchases for your own use – for an apartment or a house.

Residential Apartments or Houses

At finbird, we guide you through the mortgage process for your house or apartment. We determine the appropriate financing for your real estate purchase by comparing financing structures, interest rates and relevant mortgage terms for you. Through personalized advice, you receive a financing plan tailored to your individual financial situation and preferences.

Mortgages for Residential Homes

When you buy a house or an apartment, you can design your personal living space individually according to your wishes. In addition, your home can increase in value over time, while you lock in the costs in the form of loan installments over a longer period. This can be an attractive option, especially for first-time buyers of an apartment or house, since a loan taken out is repaid over time and the owner builds up an asset through a possible increase in the value of the property. The monthly payments for a real estate loan usually consist of an interest and a principal portion and therefore do not just represent an expense, as they do with rent.

The advantages of a loan for the purchase of a house or an apartment are a lower initial capital commitment and the general possibility of buying a property. If you want to finance a property and take out a loan for it, your financial situation will be thoroughly checked as part of the credit application, including your Schufa score, and your house or apartment will serve as collateral for the loan.

For a lender, the apartment or house serves as collateral in case you, the borrower, are unable to meet your loan payments. In such a situation, the lender can realize the value of the security in order to recover the loan. That is why the value and condition of the home are also an important component in the loan decision as the home's value defines the amount that the lender can recover in the event of a borrower default.

When lenders assess the overall risk of a financing, they also take into account the amount of equity that the borrower contributes to the financing. A higher equity lowers the risk for the lender, since less loan needs to be issued compared to the property value. In addition to the property value, however, lenders also have to check the borrower's financial situation and their ability to afford the mortgage. From the lender's point of view, an ideal borrower profile includes a high and sustainable income, good borrowing capacity and a low debt-to-income ratio. However, not every borrower can meet these requirements, which is why we aim to make real estate financing possible even for more complex borrower profiles.

When buying an apartment or house, location is one of the most important investment factors to consider. In large German cities, demand for real estate is usually high, causing the price of houses or apartments to rise. The range of properties available includes everything from modern urban apartments to attractive townhouses, each of which serves different market segments. Buyers need to weigh whether they want to and can afford higher prices in very good locations for the convenience of city life. Since buying an affordable property in metropolitan cities is not always easy or feasible, homes in suburbs or emerging regions around the metropolises can also be attractive.

Suburbs offer an alternative for buyers looking for a home with more space, a quieter, more spacious environment and a more affordable price, but still close to the urban life of a metropolis.

Financing Cases

A first-time buyer needed a loan to purchase a small apartment in Berlin. However, his temporary residence status made the search for financing partners more difficult. Many banks saw this as an increased risk and refused to make an offer. By focusing on specialized banks that are open to non-permanent residency situations, the financing was ultimately successful after a careful review of all documents. This made the buyer's project feasible despite difficult conditions.

A family was planning to move into a larger house and needed financing for their new home. The main earner was self-employed and looking for a loan that would be provided on fair terms, taking into account his variable income. The relevant documentation regarding self-employment had to be provided in its most current form, although the self-employment had only existed for two years and banks usually want to see three full financial years being active on the market. The case was successfully concluded with a lender specializing in self-employment cases.

A German citizen who had been living abroad and was planning to return to Germany needed a German Mortgage to purchase an apartment in Frankfurt. The main obstacle was that the buyer did not yet have a permanent address in Germany at the time of application and therefore did not meet the usual borrower profile. The case was presented to a lender specializing in temporary foreign assignments, which, despite the unusual situation, made a competitive loan offer and thus enabled the customer to successfully purchase the apartment.

FAQs

How does financing work for the purchase of a residential home?

Loans for the purchase of a house or an apartment are usually secured by the property to be purchased. One advantage of financing a residential home is that the costs of purchasing a home can be spread over many years and an agreed monthly mortgage rate remains fixed for a long time, while rental costs can be subject to ongoing rent increases.

What should I do if I am considering a mortgage?

First, have your financial situation checked in order to determine your specific budget for buying a house or an apartment in an initial consultation with a financing consultant. Research possible locations and regions that come into question for your purchase of a house or an apartment, taking into account local factors such as nearby schools, public transportation, and future construction and development plans for the region and location.

What are the key criteria for me being granted a loan?

Whether you qualify for a home loan to purchase a house or an apartment depends on a number of factors, including your financial situation and borrowing capacity, your current employment and income, any debts you may have, and the amount of equity you can contribute compared to the value of the home you wish to purchase.

What should I do before applying for a mortgage?

In addition to calculating your budget for the property purchase and researching the location, you should also find out about your personal Schufa score. The Schufa score, which is determined by Schufa (the German credit reference agency), provides third parties with information about your financial situation. You can obtain a Schufa credit report at any time free of charge or in real time from Schufa (www.schufa.de).

How can I negotiate the purchase price of a home?

To successfully negotiate the purchase price for your house or apartment, you should research the market prices of comparable homes in the respective location and find out more about the seller's motivation for selling the property. You can also have the property itself and its structure checked by an expert, which may be relevant for further purchase price negotiations. Be prepared to walk away from an offer if it doesn't meet your financial expectations or requirements. For the process, it is helpful to obtain a non-binding mortgage pre-approval in advance. A mortgage pre-approval that your advisor provides shows the seller that you are seriously interested in making a purchase and have the necessary purchasing power.

How long does it take to apply for a mortgage?

The loan application process may vary, but in general, it takes a few days up to a few weeks for a loan approval after submission of all required documents. Our team at finbird will provide you with information on current processing times from banks and financing partners as part of the joint financing consultation, in order to ensure a loan approval for the purchase of your home as quickly as possible.

Are there any additional fees or hidden costs if I buy a home?

When you buy a home, there are several closing costs at the time of purchase, such as real estate transfer tax, agent fees, and notary fees. After the purchase, there are a few additional costs for owners, such as property tax, ongoing management costs, etc.

How can I ensure that the property purchase is a good investment?

To get a good idea of the profitability of an investment, it is recommended that you research the location thoroughly to understand trends in the development of real estate values in the region at an early stage. Take into account future building projects, local infrastructure and municipal building projects that could affect your location and the performance of your home. It is also advisable to have a professional inspect the structure of a house or apartment before buying to identify possible risks and necessary future modernization measures.

Why should I buy in a suburb instead of a metropolitan area?

With a house or condominium in the suburbs, you can often get more living space for less money. Apartments or houses in the suburbs can also offer quieter neighborhoods and more green space. In larger cities or metropolitan areas, on the other hand, houses or apartments can appreciate in value more quickly due to higher demand and better access to jobs, excellent infrastructure and a wide range of cultural and leisure activities. These factors should be considered when choosing a location in order to select the location that best suits your lifestyle and investment goals.

Financing Process

Our advice for residential homes focuses on identifying the most suitable financing solution for the customer's current situation. The real estate financing process involves several steps, including determining the possible purchase budget, identifying an individual financing concept, and selecting the right financing product and partner for the customer. Common mistakes happen when a person's own situation is not properly assessed, additional costs such as closing costs are not correctly factored in, or the effects of a future interest rate risk are not considered. We advise and support you on all these points and accompany you from the credit application to approval. In doing so, we place a high value on comprehensive education and transparency so that you are well prepared and can complete a financing that meets your goals and preferences.