Extending the living space by adding an extension can significantly increase the value of a property. Provided that the realization is carried out under high quality standards. To ensure this, the investment sum must not be underestimated.
Building materials, craftsmen and personal services can eat up a lot of money. With solid financing, the project can be successfully implemented. Tips on how to do this are the subject of this guide.
Choose the type of loan wisely
Depending on the house extension, the total cost may well be less than 50.000 euros. What is basically good for the household budget can prove to be expensive when it comes to financing. The reason: smaller loan amounts usually require the same administrative effort from banks as large construction financing, which is why the interest rates for mini-loans can unfortunately prove to be comparatively high.
In addition, when taking out construction financing, homeowners must calculate the financial outlay for the basic debt. To avoid unnecessary expenses, it is worthwhile to take out a relatively unbureaucratic installment loan. Here, no entry in the land register is necessary, which eliminates land register and notary costs, and the overall process is much less complicated.
While interest rates may be higher than those of construction loans, the borrower benefits from more flexibility and can also pay off the loan early without having to pay an expensive prepayment penalty to the lender, which is common with many construction loans.
For additions, it can also be worthwhile to ask about customized renovation or modernization loans. These are granted to property owners, are earmarked for a specific purpose and often carry attractive interest rates. Additions between 5.000 and 50.000 euro can be financed with it, a land register entry is not necessary.
In addition to traditional bank loans, it is also possible to obtain the desired amount from private lenders via virtual marketplaces. This is made possible by intermediary platforms that bring together private borrowers and lenders. A fee is charged for the mediating activity.
At the auxmoney online marketplace, which brokers private loans, consumers can, for example, take out an instant loan, which can be processed entirely via the internet using video chat identification and digital signature. The time span between loan conclusion and disbursement is comparatively short due to accelerated communication.
Such a loan can be particularly useful for the self-employed and freelancers, a group of people who often have problems obtaining loans from house banks because of the increased risk involved. However, it is also generally worth comparing several sources of credit in order to find the most favorable offer in each individual case.
Tips on how to proceed sensibly
In general, the financing of extensions is easy to realize for the most part, since banks like to see and promote the associated increase in the value of the property.
The question for most financing is therefore not whether it is possible, but rather which type of loan would be ideal. To find out, the following procedure is advisable:
- Draw up a cost plan: before examining banks and other financing options, draw up as detailed a cost plan as possible for the building project. This is done with architect, construction managers and craftsmen.
- Submitting an inquiry: based on the cost plan, an inquiry is first submitted to the house bank for construction financing. Depending on the type of cultivation and investment, it can be low interest. However, the house bank can reject the request for several reasons. One of them is debt. If the building is not at least 80 percent debt free, it would be unlikely that further construction financing would be accepted. An installment loan is then the better choice. For this purpose, offers can be obtained from various banks and online marketplaces.
- Compare: a comparison is always advisable. Comparison portals take over the sometimes tedious research work and compare offers from well-known credit institutions free of charge and without obligation.
Use state subsidies
Earmarked modernization loans are subsidized by the kfw. Among them, for example, measures for energy modernization. Whether it is worthwhile to meet the requirements for the approval of state funds for a cultivation, it must be individually examined and calculated through.
You can't do it without detailed advice from an expert, because the subject is enormously extensive and makes specialist knowledge indispensable. The digital brochure "the kfw subsidy for your home: benefit now from favorable interest rates and subsidies" provides initial information on the various subsidy products.