Mortgage

Eastern Germany has nothing to offer start-ups? Misconception. They are courted in Dresden and Leipzig. Part four of the absatzwirtschaft series on start-up regions in Germany.

Dresden scores with Elbflorenz flair, low rents and first-class technology research

Justus Nagel gives a friendly wave, grabs a bottle of Club Mate and exits the glass box that separates his startup from the others. Nagel is the epitome of a cool founder in 2016: well-groomed full beard, glasses, black polo shirt. And then there's Club Mate. What it is? Nagel laughs somewhat sheepishly. "Iced tea brew. It's hot right now."

When searching for the right construction financing for a planned home purchase, some stumble upon the option of running their real estate financing through a life insurance company. So-called insurance loans, however, are only worthwhile in certain cases where tax advantages are in the foreground. But how does construction financing via life insurance work in the first place??

Life insurance and grace loan in combination

In construction financing, consisting of life insurance and a loan, the loan is repaid at the end of the agreed term by means of the life insurance policy. In fact, just a few years ago, this option was very common.

The reason: the income from the life insurance was tax-free.

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In addition to meeting the loan limits, you need to make sure your credit score is good enough to qualify for one of these mortgages.

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We can finance rented condominiums through our loan partners up to a maximum of 100% of the purchase price. In addition it needs however a "reasonable" real estate and above all a good credit standing. Who believes to be able to buy and finance a rented condominium without a minimum of financial reserves is mistaken (even if some self-proclaimed real estate gurus like to claim the opposite).

Many banks and savings banks (but not all) have tightened the requirements for capital investors in recent years. Some banks have implemented income limits, while others require a higher surplus in the sog. Budget calculation (= comparison of monthly income and expenses). Besides, banks also have different approaches to rental income and to the sog. Management costs. In practice, this means that banks calculate quite differently for an investor than for an owner-occupier. So it can happen that the financing of an owner-occupied apartment would be possible without any problems, but the banks "shake their heads" at the same apartment as a capital investment.

How much equity capital must one use?

If you want to be considered a capital investor, you have to expect to invest your own capital as well (and not just the bank's). As a general rule, you should pay at least the incidental acquisition costs yourself. Whether and in what amount further equity capital is necessary or. makes sense depends on various factors, for example:

Savers who want to invest money are finding it increasingly difficult to find a lucrative and at the same time safe investment. Until now, conservative investors still considered government bonds to be safe and reasonably profitable. However, if one looks at the development this year, an alarming picture emerges.

The current yield on German government bonds showed a consistently negative trend, falling by 70% from 1.65% to 0.51% in the period from January 2014 to today. If the forecasts of many financial experts are to be believed, a further drop in the current yield to below 0.5% is imminent as a result of the low interest rate policy of the European Central Bank (ECB).

The current yield as an indicator of the interest rate level

The term current yield is often heard and low current yield is considered a bad sign, especially for savers. But what does this term from the financial world actually mean??

Good news for tenants, bad news for landlords: Despite markedly higher mortgage rates, the mortgage reference rate, which is the benchmark for residential rents in Switzerland, is unlikely to rise before mid-2024, Credit Suisse forecasts.

With mortgage rates on the rise, property owners are facing higher costs. According to a Credit Suisse study of the Swiss housing market, the "conceptually sluggish reference interest rate," as the bank writes, is unlikely to rise before mid-2024 in the most likely scenario. The additional financial burden thus remains with the landlords in the short to medium term, tenants are spared from higher rents for the time being.

In the event of a change of tenant, higher interest costs can generally be passed on in full to the tenant, provided demand permits. However, for existing housing, rents in Switzerland are tied to the mortgage reference rate. This is based on an average interest rate of all outstanding mortgages as determined by the Swiss National Bank and published quarterly by the Federal Office of Housing.

• First, you're a 'delinquent'
• Next You Are 'In Default'
• What you can do
• The downside
• Worst Case Scenario
• The Bottom Line

If you don't pay your student loans, you probably won't find a team of armed U.S. Marshals at your doorstep, as one Texas man recently did. But it's still a very bad idea to ignore these debts.

In most cases, defaulting on a student loan has exactly the same consequences as defaulting on a credit card. But in one respect, it can be much worse. Most student loans are guaranteed by the federal government, and government officials have powers that debt brokers can only dream about. It probably won't be as bad as armed marshals at the door, but it could be very unpleasant.

Here's what happened.

T he upheavals of the past few years have posed major challenges for established companies; for others, rapid change can mean great opportunities. Entrepreneurs are breaking new ground in important new areas, from artificial intelligence to biotechnology to super-intelligent energy meters. Here we look at six companies that make the most of the moment.

Green energy options

Keep an eye on Cambridge-based energy specialist Green Energy options this year. The company known as Geo was founded in 2006 as a traditional smart meter company and has grown slowly, shipping more than 8.5 million devices to date. The energy crisis could lead to a further boost in business as households scrutinize their consumption more closely to save money.

Geo's energy management system detects when a house is empty and turns down the heating. It can also automate the operation of appliances so they are used when electricity is cheapest, saving an estimated 10 pence per kilowatt hour (kWh) or more. This can reduce the demand for fossil power generation, which is still relied on at peak times. Geo's technology charges electric vehicles off-peak to save on driving costs, and the company estimates it has saved customers a total of £800 million and 20 terawatt hours of energy.

Repaying a loan can take many years and is often not only a financial burden for the debtor. It is all the more interesting that borrowers can significantly shorten the repayment period thanks to unscheduled repayments. But what exactly does unscheduled repayment mean for different types of loans, what are the advantages and disadvantages, and can it really save money in the long term??

What does unscheduled repayment mean?

An unscheduled repayment is an early partial repayment of a loan. However, this repayment is subject to a number of restrictions. First of all, the unscheduled repayment is not always a basic right of the debtor. It depends on the type of loan, whether it can be repaid early and in any amount. Furthermore, the possible amount of an unscheduled repayment is often clearly limited. In the case of construction financing, it is about 5% of the total loan amount that can be repaid in the form of an unscheduled repayment. Online loans are, however, not as high as conventional real estate loans.

The unscheduled repayment of an installment loan

In the case of an installment loan, since 2010 there has been a fundamental and legally secured option to repay it in part or in full at any time after one month of the loan term. However, the lender is free to demand a so-called early repayment penalty to compensate for the lost interest income (§ 489 BGB). This amounts to up to one percent of the net loan amount. Only for terms of less than one year, a maximum of 0.5 percent of the loan amount may be claimed in the form of an early repayment penalty.

With the nowhere cheaper guarantee of Verivox you are on the safe side. If you should receive the same installment loan of the respective credit institute, which they locked over us, over the concrete credit institute or a credit mediator to a more favorable interest rate, we refund you the interest difference – maximally however an amount at a value of altogether 300 € – in the form of a unique payment directly on your account.

With the nowhere cheaper guarantee of Verivox you are on the safe side. If you obtain the same installment loan from the respective credit institution that you concluded through us at a more favorable interest rate through the specific credit institution or a credit intermediary, we will reimburse you for the difference in interest – up to a maximum amount of €300 in total – in the form of a one-time payment directly to your account.

With the nowhere cheaper guarantee from Verivox you are on the safe side. If you should receive the same installment loan of the respective credit institution, which they locked over us, over the concrete credit institution or a credit mediator to a more favorable interest rate, we refund you the interest difference – maximally however an amount at a value of altogether 300€ – in the form of a unique payment directly on your account.