Construction financing without equity is quite feasible with a good credit rating. Not only a new building can be financed without equity capital, but also the acquisition of an existing property. Whether you want to buy a condo or a used property. Inform yourself without obligation and free of charge about your options.
Anyone who wants to build a house or purchase an existing property can only obtain financing if they can contribute at least 20 percent of their own capital to the funding. This is at least the rule of many banks and savings banks. Of course, the dream of a house or a condominium should not burst just because you can not raise enough equity capital. If you have found your dream property, but the necessary financial resources are missing, a construction financing without equity is a possibility. What was unthinkable a few years ago is now a common form of financing. Even if you are financing a real estate or construction project without equity, you can still receive the subsidized loans from KfW Bank. No matter whether you want to build a new house or acquire an existing property. We take into account all funding possibilities within the scope of your financing.
Equity capital with the house financing no longer compellingly necessary
Until now, real estate financing has always been tied to equity. As of now, this is a thing of the past. Our financing partners enable you to purchase your own home regardless of financial reserves. Even existing installment loans are no obstacle if the creditworthiness is sufficient, or they can be rescheduled. The dream of buying a house or apartment is now within reach for many people – with construction financing without equity capital.
Real estate purchase without equity! Making the dream of owning a home a reality is sometimes the most costly and lengthy endeavor in a person's life. The more financial means you can bring in yourself, the better for your construction financing. As a rule, one speaks of an equity share of at least 20% that should flow into a financing with. But also to whom the necessary money for the purchase of a real estate or a house construction is not sufficient, does not have to do necessarily without the realization of the own four walls.
The low interest rates prevailing on the market let many think about it, also without own capital funds residential property to acquire or build. Although a certain amount of equity is desirable and is considered collateral by many banks when granting a loan, construction financing without own funds is no longer a rarity.
What counts as equity in real estate financing?
As you can see on the right, the financial means that can be used for financing a house are of different kinds. In any case, the equity must be proven to the financing bank. The bare assertion over the existence of own capital funds is not sufficient in any case.
In order to say it however again completely clearly: Available own capital funds make usually a better interest rate possible. Who however in the past, for whatever reasons, no possibility had to save sufficiently capital, can nevertheless a real estate financing receive – also with existing credit loads such as car credit or other consumer credits.
To the own capital belongs first of all all the money which you have saved before the house or dwelling purchase. In addition, there are also numerous other forms of equity. The following list gives an overview:
Equity and alternatives
- Money held in bank accounts or in call money and fixed-term deposit accounts
- private loans from relatives or friends
- available cash
- already existing, unencumbered building plot
- Saved money from Riester pension (possible according to the Home Pensions Act)
- Surrender value of an endowment life insurance or pension insurance
- own work for new construction or modernization – muscle mortgage
- another property owned by you, provided that this can be co-encumbered
- Existing building savings balance, even if the contract is not yet ready for allocation
- employer loans
Construction financing without equity – buy a house without equity
To obtain real estate financing without equity, whether new construction or purchase of an existing property, some important conditions should be met:
- Regular and high household income, which ensures long-term servicing of the loan installments
- Good credit rating
- Value of the property
The number of banks that finance 100% or even 110% of the purchase price is manageable. By law, banks are required to hold sufficient equity for their credit risks. A full financing naturally carries a higher risk for the lender than a 60 or 80% financing, which is then reflected in less favorable interest conditions.
In the present low-interest phase it can be nevertheless worthwhile itself a real estate purchase or a construction financing without own capital funds to realize. In principle, it is of course always better to bring a larger sum of equity into the financing and to save up accordingly beforehand.
Since the financing criteria vary from bank to bank, it is difficult for a potential borrower to find the optimal financing partner for his situation who wants to accompany a financing without equity capital.
Take advantage of our expertise by requesting a free consultation without obligation. Of course you can also get real estate financing with the contribution of equity capital from us. Here too: Request a non-binding and free consultation.