When is a building savings contract ready for allocation?

What exactly is a building savings contract about?

A building savings contract is a financial product issued by building societies. The savings contract exists in combination with a low-interest loan for real estate financing purposes.

The building savings contract is concluded between a building society and a private individual. When choosing a building savings contract, investors decide which building savings amount they want to pay into the contract.

After the contract is concluded, the so-called savings phase begins. Depending on how high the monthly savings contributions are, the time it takes to reach the desired building savings amount also varies.

If you pursue the goal of purchasing a property with the building savings contract and using a low-interest loan to finance the property To take advantage of this, the contractually agreed building savings amount must first be reached up to a level of at least 40% become. Only then can the saved credit flow into the financing as equity and the remaining 60% of the The borrower can then take advantage of the low-interest loan and pay it in monthly installments to the building society pay back.

When is a building savings contract ready for allocation?

If you have determined the building savings amount when concluding the building savings contract and have reached the minimum deposit of 40% of the building savings amount, then From this point on, the contract is ready to be allocated for the use of the low-interest loan for the remaining 60% Building savings amount.

It must also be noted that in addition to reaching the minimum building savings amount of 40%, the so-called Minimum valuation number and a certain waiting period must be waited for before the conversion into the loan is made can be. These sizes or The standards are set by the respective building society and vary depending on the tariff taken out, the building savings amount and the amount of the monthly savings contributions.

Are there alternatives to the building savings contract?

If you take a closer look at the composition of the building savings contract, you should make up your own mind Ask the question as to when you will use the building savings contract to finance a property want. As already described, the use of the low-interest loan depends, among other things, on: from which point the minimum building savings amount of 40% of the contractually agreed building savings amount is reached becomes. If savings contributions are low, it may take a longer time until you have saved this amount and can access the capital.

Alternatives for equity that you can use when financing real estate include current account accounts, savings accounts, fixed-term deposit accounts or securities. Here you have faster availability to access your saved capital, like with a building savings contract.

You can also take out a classic construction or real estate loan from your bank for real estate financing.

However, you can also continue to maintain the building savings contract and continue to save with small contributions Use the accumulated credit in the future to pay off the debt on the property you have already purchased can. You most likely no longer have the goal of taking advantage of the low-interest loan. Accordingly, you do not have to have reached the minimum building savings amount of 40% in order to use the capital you have saved to pay off the debt of an existing real estate financing. You should consider this option if necessary. Take a closer look at your contract data for the building savings contract and discuss it with your responsible building society.

Ultimately, everyone has to decide for themselves whether a building savings contract is a worthwhile investment for their own wishes and possibilities.

For financing purposes when purchasing a property, it is important to pay attention to when the contract is ready for allocation so that the necessary capital is available at the time of financing have.