Independent mortgage advice
We are here to serve you as an independent mortgage broker:
Do you want to buy some real estate in Germany to live in or simply as investment to rent out? Regardless if you are a resident in Germany or rather want to purchase the real estate while living abroad as a foreign Real Estate investor: we can help you to find the right mortgage and process your application so that you have to suffer only a minimum of fuss with German banks.
To this regards we are often acting more as a “cultural translator” than as an advisor initially. For Expats and foreign investors it is sometimes a nasty surprise to find out that banks in Germany are very conservative, to say the least, in lending money for real estate. A foreign investor who just wants to purchase an apartment or a couple of them as a good investment, will have to understand that the best he can expect is a LTV (loan to value ratio) of around 50-60% tops. The reason for these LTV being that German banks do not expect the value of a property to rise sharply in short periods of time on one hand and thus look at the worst case – foreclosure – on the other hand just based on the property value. Since foreclosure often leads to auctioning of the property where in the second round of auctions even bids of 50% and less have to be accepted, banks are keeping the LTV low accordingly because they do not trust that they can lay their hands on foreign property or income if meant as a collateral.
For German residents it is a wee bit better: if you have been a resident for while in Germany so that you have some (local) proof of income in the form of a tax note, you can get – depending on your source of income, i.e. whether you are self-employed or an employee or even a public servant – much higher LTVs. Especially employees in an unlimited contract and public servants can well expect 100% of the property value, assuming of course that their own income or rental income can sustain the dues for the mortgage properly. Self-employed persons should expect to lay down a down payment of around 20-30% most often, unless you have a good and longer standing with your bank.
It is also important to understand the side-costs when purchasing property in Germany. Therefore we are offering some basic info on our website and are happy to help you with concrete projects if you like to get our assistance. Just use our contact form or call 0700-226525688 or send an email to email@example.com