Wooden house financing: opportunities, risks, reports
Chances for a successful wooden house financing
For the financing or the loan of a wooden house there are stricter conditions than for loans related to a stone house. The stricter rules are explained in part by the fact that wooden houses in Germany are built much less frequently than in Scandinavia or in parts of the USA, so that financial institutions with mortgage lending of the respective houses have less experience.
To a large extent, the concerns of some banks against the financing of wooden houses but also factually justified. After all, unlike concrete, wood is easily flammable, even though the actual dangers to good and good can be minimized by careful use of fire. The wooden house is popular in the first place because of the exclusive appearance and because of the natuness of the mainly used building material.
The difference between financing and lending
In common usage, which most banks also use to communicate with their clients, the term loan is used to refer to a loan in which a property serves as a collate without the use of the loan for its acquisition or redevelopment. These loans in the narrower sense offer only a few banks, while loans to finance the acquisition of real estate as well as renovation loans to the basic offer of almost all financial institutions and some insurance companies.
The advantage of a loan against a installment loan is a low interest rate. Nevertheless, it is worthwhile only for large sums, since the savings in the lending rates are offset by additional costs for the land register entry and for the notary. A wooden house, like any other property, can be both loan-financed and mortgaged, even if not every bank offers loans for that particular type of home.
Wooden house financing without equity hardly possible
Most financial institutions require an equity ratio of at least twenty percent for real estate loans. For prefabricated houses and for solid concrete buildings, however, there are alternative offers for full financing without equity. For wooden houses, on the other hand, almost no bank offers complete financing.
However, there is still the possibility to finance a wooden house with existing financial resources of less than twenty percent of the construction costs or the purchase price. This is because the financial institutions calculate the equity ratio in different ways. Some banks value not just actual assets but nearly all of their equity as equity, which they do not have to finance themselves. Thus, the promotional loan from intrasavings bank Bank as well as the loan from Bausparkasse are part of the existing construction capital.
In-house services by the client can also be included in the equity ratio. In the financial planning for the repayment of the loan for his wooden house, the builder or real estate buyer takes into account that in addition to financing by the bank, he also has to repay the other loans, such as the intrasavings bank development loan and the building society loan.
The quality label reduces the risk of the bank in a timber house financing
Before banks agree to finance a wooden house, they ask for a report on house quality and fire safety. The fees to be paid for the construction assessment additionally increase the costs of the financing.
Some banks will refrain from submitting a specific opinion if the wooden houses to be financed carry the label. This is only granted to manufacturers whose timber houses comply with strict safety regulations, so that their financing is considered to be non-hazardous. The seal of approval is worn by many houses of renowned manufacturers. Another noteworthy prerequisite for the financing or loan of a timber house is the conclusion of a sufficient building insurance.
This insurance is mandatory for any property ownership anyway. The fact that insurers demand higher premiums for wooden houses than for concrete buildings is understandable due to the greater risk of fire.
As with the interest on the loan or the loan financing of the timber house can be easily find a cheap offer for its insurance protection in a price comparison.
Finance a wooden house and compare the cost of credit properly
Since not every bank is willing to finance a wooden house, consumers are sometimes content to even find financing for their timber property. The acceptance of the first offer for the loan or loan financing of a wooden house, however, does not make sense, since the interest rates as well as the conditions differ greatly depending on the financial institution.
Most builders or home buyers prefer an annuity loan with as long as possible a fixed interest rate for the financing as well as for a possible loan of their wooden house. Thanks to cost certainty, this makes more sense than a loan with a variable interest rate, even though this should initially be cheaper.
Basically, a timber house, the mortgage lending on the term loan of an insurance company is possible, but is offered even less than a bank loan.