One day the modernization of every property is due. For existing properties, there are almost always areas that modernization measures would do well. But whether roof, windows or heating, modernization work is coupled with considerable costs. For most homeowners, this means having to take out a loan.
Difference between modernization and renovation
Before we go into more detail about the financing, a brief note on the importance of the two terms modernization and renovation. For most people, both terms mean the same thing. This is not the case, the difference is big.
The renovation only refers to measures that are of a cosmetic nature. For example, who wallpapered walls or laid new floor coverings is renovating. On the other hand, the substance of the building is not concerned with renovation. If there are enough measures beyond typical beauty work, there is talk of modernization. If, for example, new windows are used or the roof is insulated, modernization measures undoubtedly take place. This distinction is important because modernization loans are really only provided by the banks for modernization purposes.
Determine financing needs
Before taking out a loan, the first step is to examine the costs that modernization is likely to entail. It is important to plan exactly. The matter should be handled as seriously as a construction project, because if the costs are higher in the end, expensive re-financing may be required.
A follow-up financing should be avoided as far as possible. In case of doubt, it is usually even better to take on a slightly higher loan amount and thus create a financial buffer. If it is possible to make special repayments, it will not be difficult to repay the remainder of the loan immediately. So it is possible to avoid the creation of unnecessary interest costs.
Find the right financing partner
As a rule, the financing is provided by a classic real estate loan, ie there is a collateralisation by way of land charges. In return, the bank is prepared to pay outstanding interest on its modernization loan.
In view of this situation, many owners make the decision to finance the bank that is already in the land register. However, it should be checked whether attract appropriate conditions there. Otherwise, it may be worthwhile taking up the modernization loan with another bank. Especially since it is partly about really big loan amounts. A comprehensive energy modernization often requires a six-digit investment.
Support from the expert
We are happy to assist you in finding the right loan. On the one hand, our independent consultants help to optimally shape your financing – taking into account your personal needs. On the other hand, a comprehensive interest rate comparison takes place; loan offers from hundreds of banks are identified and evaluated. In this way it is possible to gain access to excellent conditions. Your request and the advice are of course free. At the same time, you do not take any risks at any time because you can freely decide at any time whether and where you would like to finance your modernization.