Originally developed to finance municipal and non-profit housing companies, forward loans have also become a very interesting form of mortgage lending for the average consumer in recent years. The current debit interest rate can thus also be secured for real estate financing, which would only be used after months after conclusion of the contract. (Learn more about the current interest rate development in interest commentary on mortgage lending. ) The borrower has the opportunity to receive a borrowing interest up to 66 months in advance. Not always easy to distinguish are real and fake forward loans. The experts of DTW | Real estate financing therefore recommends to be informed before the conclusion of such a forward loan about the differences, pros and cons of mortgage lending and whether a real or fake forward loan would come into question in real estate financing.
Real vs. Vs. fake forward loan
The interest rate development is in record low – payday loan money is, therefore, cheaper than ever- submit application now. This benefits homeowners who want to secure their borrowing rates for a follow-up financing of the outstanding balance of their real estate financing with a forward loan. The advantages are obvious: planning security and the low-interest-rate guarantee.
The difference between a real and a fake forward loan is the beginning of the term of the borrowing rate and the premium for reserving the current borrowing rate over several months. But whether a real or fake forward loan represents the better form of the contract depends on the respective initial situation of the borrower.
In the case of a real or classic forward loan, the interest rate commitment begins after the forward period has expired – a pre-defined lead time of several months (maximum of 66 months). Thereafter, the actual debit interest begins with the payment date. For example, if the forward period is set to 12 months and thereupon a 10-year debt interest, the repayment period is a full 10 years.
The advantage of a real forward loan: The borrower has the full time of the interest rate commitment for repayment and receives interest rate security of 10 years.
The situation is different with the fake forward loan. Here, the debt interest begins with the conclusion of the contract. However, the loan will not be disbursed immediately. Only the non-deductible time, which normally amounts to 3 months, is extended in the case of a fake forward loan. Therefore, the borrower should be aware that the forward period of the phony forward loan is actually an extension of the non-provisioning period. The payment and the repayment of the loan are only made at the end of the interest-free loan period in the case of a fake forward loan. Compared to the above-mentioned example with a 12-month lead time, the repayment period of the construction loan is therefore reduced to 9 years from the date of payment.
In most cases, a fake forward loan is offered for a forward period of fewer than 12 months. In order to avoid surprises, however, attention should always be paid to the debt interest end before concluding a contract.
The benefit of a fake forward loan: The premium for reserving the current debt interest rate is lower compared to the classic forward loan. A comparison can be worthwhile!
Reason for financing: Buying a property new follow-up financing Type of property: condominium detached house Two family house Apartment house Semi-detached house Offer without obligation
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Excursus supply interest:
Due to weather or other construction delays, the call of the construction field may shift backwards. For future builders and ladies, therefore, an occupation with the topic “deployment rate” is indispensable.
Therefore, to cover the refinancing costs incurred by the delay, lenders generally provide a commitment rate for the loan sums.
Typically, this commitment rate is 3 per cent per annum, or 0.25 per cent per month, and is calculated either from the loan portion used to date (allowable commitment rate) or from the full loan (non-eligible commitment rate). Normally, however, deployment interest does not become payable until the seventh month and an extension of the non-provisioning period is possible up to 18 months against an interest charge.
Whether real or fake forward loan pays off for you in the end, you can use the forward calculator from DTW | Determine real estate financing yourself. Or contact us! We look forward to your inquiry and will be happy to make you a non-binding offer .