What to do if you run out of money when it comes to mortgage lending? The solution is: consolidation. Unfortunately, often an expensive affair. We show how it works and how you avoid such a scenario from the outset.
What is a consolidation?
A follow-up financing is always required if the existing mortgage lending is insufficient to cover the construction costs. This may be the case, for example, if the construction project is delayed due to unforeseen events such as aqueducts near the construction pit or storm damage. Or if the client decides to install more expensive parquet instead of the planned laminate. If he can not pay the additional costs out of his own pocket, he must also initiate additional financing.
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Refunding means higher interest rates
Basically, consolidation is usually more expensive than the first construction loan . This is due to the higher interest rates that banks apply to compensate for the lack of credit security and the high workload. Another problem is the mortgage lending limit of the financed property. If the mortgage lending limit has already been reached with the actual construction loan, further financing becomes difficult. But in most cases there is a solution. Our consultants specialize in finding ways to consolidate even in complicated circumstances.
Tip: Loan with reserve option
Basically, it is advisable not to calculate at a mortgage lending at the lowest limit. It would be better to set the loan amount higher from the beginning, instead of needing to consolidate afterwards. You can circumvent this scenario from the outset by choosing a first loan with a so-called reserve option: This gives you the option of additionally obtaining a specific amount that was not intended from the beginning via the original mortgage loan. Just make sure that your bank does not charge extra for this.
Required documents for consolidation
In the middle of the construction project suddenly new costs arise, and you need fresh money again to complete the new building? Do not worry – just leave it to our specialists. All we need from you are certain documents:
- a completed application for funding
- proof of income
- a list of the outstanding activities
- A confirmation from the architect that the additional amount will be sufficient to complete
Everything else we do. The expertise of our specialists will help you to find the cheapest real estate loan, and you will receive in the same step the best offers from our 400 banking partners. So keep your nerves and the gaze on the essentials: your the way to your own home.
Cheap consolidation, nothing to regret
Our mortgage specialists help you out of trouble in an emergency and find a good, feasible offer for you. On request, one of our nationwide 550 consultants will accompany you from the application to the payment and answer your questions. For you, our service is completely free.
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