With the forwardplus concept, you can secure interest rates for later financing

Written by Olaf Varlemann – Managing Director Baufi-Nord GmbH.

Those who are looking to build a property in the coming years or. wants to buy, is planning more extensive modernization measures or needs follow-up financing, is faced with a dilemma. Due to the rise in interest rates and the current situation in the financial markets, it is difficult to predict what interest rates you can expect in the future or what you can expect in the future. must. Since it would currently really make sense to secure the current interest conditions.

Secure interest rates for follow-up financing?!

If you want to secure the interest rate conditions for your follow-up financing in a maximum of 5 years, you currently have it relatively good. There you can today quite simply a sog. Forwarddarlehen take up and reserve themselves so the current interest rates for your follow-up financing. Such a forward loan is a completely normal bank resp. Annuity loan that is not paid out immediately, but only in 1 to 5 years. Until the disbursement date, the bank does not charge any interest. For this, however, you have to pay a surcharge on the current interest rate conditions (usually approx. 0.02% per month lead time until the rescheduling date).

Save interest for other uses?!

A classic forward loan would also be a good option if you want to secure current interest rates for another financing project. For example, if you want to buy a property in 5 years or extensively modernize your existing property, you could secure the current interest rates for it with such a forward loan. There's just one small problem: forward loans are only feasible for follow-up financing!

The reasons why a forward loan is only suitable for rescheduling or. There are many ways in which follow-up financing is feasible. DKB (Deutsche Kreditbank AG) tried something different a few years ago. For umpteen reasons, this "went thoroughly in the pants". Since then, the banking world has agreed: forward loans only for follow-up financing, please!

What alternatives are there to the forward loan?

To secure interest rates on real estate financing in the future, there's only one way to do it: building savings. With this, you can currently secure interest rates of approx. 0.99% to ca. 2.99 % secure. The way there is however laborious, because before one gets a favorable loan from a building society, one must deposit there first over a longer period of time. These so-called. The savings phase can last up to 15 years, depending on the building society, the building society tariff and the savings rate.

Example: capital requirement in 10 years 100.000 euros

We have picked out and compared the offers of 2 building societies here. The offer of Bausparkasse A corresponds approximately to what most large building societies can offer at present. Bausparkasse B is a smaller bausparkasse, which has a lower interest rate for the parameters (e.g. the interest rate on the loan) than the other bausparkasse.B. savings rate and loan term) is considerably more flexible than others.

Comparison of bauspar tariffs

The problem with classic building savings: either the savings phase is very long (i.e. it takes quite a long time until you get the loan) or the savings rates are very high. With most building societies, a short savings phase also leads to high interest and redemption rates for the building society loan (because the loan term is then also very short). And if you need the bauspar loan in less than 8 years, many bausparkassen become really gloomy. Only a few bausparkassen are able to allocate a loan in less than 10 years.

Alternative ForwardPlus!?

We thought about how to turbo-charge the building savings process. On the one hand, we wanted to shorten the "waiting period" (i.e. the accumulation phase) and on the other hand, we wanted to enable more building society loans (or, conversely, significantly reduce the monthly outlay). Motto: the more loans and the earlier, the better!

Our good fortune was that we did not have to reinvent the wheel. Many of our colleagues (including myself) have been in the business for over 20 years, so we only had to look at the past. And this was the past high-interest phase (the somewhat older ones remember). However, we have not simply rummaged in the mothballs, but the principle of the so-called. Immediate replenishment of building savings contracts thoroughly dusted off and provided with new general conditions.

Immediate replenishment?!

Instead of saving the credit balance required for a building savings contract by means of monthly savings installments over many years, this credit balance can also be paid in immediately and in one sum. With most building societies, this means that the building loan can be allocated much earlier (the savings phase is therefore much shorter and the building loan can be obtained sooner).

The problem with this variant: you must also have the appropriate capital to be able to pay it into a bauspar contract. And this is exactly where our "Forward+" comes in! We obtain a favorable loan for you, with which we finance this instant replenishment. This sounds strange at first, but it has an enormous effect compared to classic building savings.

Comparison Bauspararife incl Forwardplus

Important: in the example, it is a matter of calculating the capital requirement in the amount of 100.000 euros to be covered in 10 years. In the case of classic building savings, you naturally save equity and the building savings loan is correspondingly smaller. In this respect, the variants can only be compared to a limited extent. But: you can clearly see that with the Forwardplus concept you can secure a high building society loan with comparatively little effort.

What you can't really see in this example: it usually makes little sense to bet on the lowest interest rate for the bauspar loan. If you want the lowest interest rate, you usually have to save significantly more AND pay back the building society loan in a very short time as well. This then results in terms and rates that are in the order of Bausparkasse B. What should not be forgotten: with such a short loan term it almost does not matter whether you have to pay 1% interest or 2.35% interest.

Not bound to certain building societies?!

What is also innovative in our Forward+: we are not bound to certain building societies for the replenishment loan. This is a significant difference to other similar models (see for example Commerzbank in combination with Bausparkasse Wüstenrot). We have the possibility to choose from the variety of offers of different building societies the one that suits you best.

With ForwardPlus is suitable for various financing projects!

With our ForwardPlus concept we finance:

  • Follow-up financing in more than 5 years
  • Renovation and modernization costs
  • Extensions and conversions
  • Payment of co-heirs
  • New construction or purchase of an owner-occupied or rented residential property

Important: the financing project should be at least 3 years in the future (this is i.d.R. the minimum waiting period of the building societies until the sog. Allocation of the building savings contract).

The devil is in the details!

The basic principle of ForwardPlus is very simple (if you can "think around the corner"). But it depends very much on the details. And these are mainly in the selection of the building society and the building society tariff. If you simply choose "any building society" and "any building society tariff", it can take 10 years instead of the planned 3-5 years until you can take advantage of the favorable building society loan. In addition, the interest and redemption rate (annuity) can be so high if the wrong choice is made that the favorable loan is not affordable due to the high redemption rate.

The building society and the building society tariff also determine the later interest rate. This is usually between 0.99% and 2.99 . The following applies: the lower the interest rate, the faster you have to repay a building society loan. But even the maximum interest rate of 2.99% you get today from banks no longer even if you have a property only to a maximum of ca. want to borrow 50% of the value of the property.

Of course, the interest rate is also important for the sog. Replenishment credit. It's currently (as of June 2022) only 2.55% with one of our banking partners (debit interest rate; 2.65% effective gem. PAngV; fixed interest rates for up to 10 years).

And what should not be forgotten: the whole financing concept must be structured in such a way that the respective building society can also grant the loan in the end. For this purpose, very specific conditions must be met.

That's where professionals come in!

With the ForwardPlus concept, there are a number of things to consider. In addition, there are dozens of possible combinations that you have to go through in order to arrive at the best possible result. A software or. App that does this with a few data at the push of a button, there is not. This is where experience and expertise are needed above all.

As independent construction financing consultants, we are – unlike many banks, for example – not bound to specific building societies. We can select the optimal solution for you from a wide range of building societies and building society tariffs.

If you want to secure your financing project against further increasing interest rates in the future, simply talk to one of our colleagues or to one of our partners. a colleague in one of our partner offices near you. You can also use our online inquiry, then we will forward your inquiry to the colleague or to the partner. the colleague in your proximity further.

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