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Master Investment

Mortgage Process in Germany

Mortgage Process in Germany
  • Terms used by banks in Germany
  • Who to contact
  • What information bank need to give an offer
  • Documents required by the bank
Beginners Guide to Mortgage in Germany

Part 1.1: Terms used by bank in Germany

1. Darlehensbetrag

2. Tilgung

  • First way is to tell them how much monthly euros you are willing to pay.
    eg: 600 euros every month.
  • Or you can tell them in percentage. eg: 2%. So what does that mean? It means you want to pay off at least 2% of the mortgage amount every year. So bank will take 2% of your mortgage amount and add the interest you need to pay in it. Finally divide that sum by 12 to give your monthly installment.

3. Sollzinssatz: Interest Rate

4. Dauer der Sollzinsbindung

5. Sondertilgung

6. Restschuld

Part 1.2: Who to contact

  • how much credit you can get,
  • documents that are required,
  • whether you are eligible to get a credit in Germany or not
  • you can even ask them questions related to buying and selling process.

Part 1.3: What information bank need to give an offer

  1. Net monthly income
  2. Source of your income; whether you are employed or run your own business or have any rental income, etc.
  3. Bank will also be interested in how much savings or cash you have to cover the nebenkosten.
  4. Your living situation, whether you are living in a rented property or of your own. If you are living in a rented property then what is the rent.
  5. Do you have any other loan/credit. If yes, how much it is and for what purpose.

6. Information about the apartment.

  • First thing here bank would like to know is, in which price range you are looking for an apartment.
  • Next is, whether you are planning to buy a new or an old apartment. If it is an old apartment, there is a possibility that it needs renovation. So some banks even finance the renovation costs.
  • Lastly whether you want to rent the apartment or live in it yourself. This helps bank to know how much rental income you can get if you rent the apartment or how much rent you can save if you live in that apartment yourself.

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Ankit Goyal

Agile coach, founder of “master investment”, and a writer. Discovering myself anew by writing and vlogging — masterinvestment.official@gmail.com