Construction Financing

Follow-up financing secure forward loan for mortgage interest rates have fallen to historic lows. The opportunity is cheap to take care of a follow-on financing for borrowers with a soon-expiring real estate financing. Effects of the euro debt crisis In September the effective interest rates for mortgage loans with a 10-year interest rate bind time the average amounted to less than 3.5 percent, announced the Federal Association of German banks. Ten years ago, borrowers for similar loans must muster more than six percent. By the current euro debt crisis safe food Bunds are in high demand, which has pushed the yields for these investments. Because it in turn, interest rates for construction money are aligned, these have fallen. In addition a strong competition among providers. How long to remain on low interest rates, is not sure.

Only boasts a location in the eurozone is stabilising, it will reflect a trend upward, experts suggest. But would impact Monetary policy of the European Zentralbank(EZB): a further interest rate hike due to rising inflation could also the lease let rise. Establish interest for later but either way: in the medium term is to expect rising construction interest. For borrowers, whose funding will expire soon, an opportune time has come therefore to deal with the follow-up financing. With the end of the interest rate bind time the choice is made, to continue the loan either at the old bank or to switch to another provider. Alternatively, it is also the opportunity to complete a forward loans and thus to secure current low interest rates in advance. One to five years before the date the borrower may agree to the subsequent credit. The loan runs out in four years and the property owners signed the forward now, gains in four years, so to start the new contract, the current conditions – even if interest rates have risen in the meantime.