A forward loan is a kind of insurance against rising interest rates. Insurance costs money, which affects a forward loan in the form of an interest premium. The amount of the interest premium depends on the bank and is also determined by the so-called lead time to time from now until the debit interest rate has expired).
Avoid stumbling blocks when choosing the borrowing rate
If the target interest rate of a building loan ends in the next 2 years, you can consider a forward loan. However, if property owners chose different loan modules at the time (eg bank loans and loans), then a certain stumbling block should be avoided.
Example of follow-up financing with a forward loan that has not been thought through
Suppose a property owner divided his mortgage back then into different loan modules for various reasons: two bank loan parts and one loan part. The borrowing rate of all loans ends at the same time after 10 years. Almost two years before the borrowing period expired, only a large part of the remaining debt was covered by a forward loan. So now the follow-up financing of the other two loan parts is due.
And right now, insufficient advice on the forward loan is noticeable: the two other loans now have to be financed by the same bank that accompanied the forward loan. You are in a dependency that could have been avoided in advance. This is based on the land register. The bank of the forward loan receives the first rank. For other banks, this loan is a preload and often makes financing impossible.
Conclusion of follow-up financing with forward loans
Whether a forward loan makes sense depends entirely on the personal security needs of the property owner and the amount of the interest premium. If a forward loan is concluded and there are several loan modules, then the financing should also be considered in full and independently . These include the following questions: What happens to the other parts of the loan if I only conclude a forward loan? Am I bound then? May the dependency harm me? Too often, property owners have no choice but to continue financing from this bank. Not infrequently to their disadvantage.
Do You Have Questions? Then please contact us.