{"id":10581,"date":"2023-01-09T06:26:44","date_gmt":"2023-01-09T06:26:44","guid":{"rendered":"https:\/\/chettioan.com\/?p=10581"},"modified":"2023-01-26T06:51:48","modified_gmt":"2023-01-26T06:51:48","slug":"borrowing-in-denmark","status":"publish","type":"post","link":"https:\/\/chettioan.com\/borrowing-in-denmark-10581.html","title":{"rendered":"Borrowing in denmark"},"content":{"rendered":"

\"\"<\/p>\n

It is not uncommon for the purchase of a property to require the taking out of a loan. If you already live and work in Denmark, you may be eligible for a real estate loan from a Danish bank. What you have to fulfill and pay attention to, you can find out here!<\/p>\n

Who can take out a loan in Denmark<\/h2>\n

First the good news: EU\/EEA citizens who want to buy a property in Denmark have the same rights as Danish citizens when borrowing from Danish banks.<\/p>\n

However, this equal treatment requires the fulfillment of one of the two criteria:<\/p>\n

    \n
  1. You must have lived in Denmark for at least five years or<\/li>\n
  2. You have a paid job in Denmark or a business in Denmark<\/li>\n<\/ol>\n

    Important: These criteria only apply to the purchase of real estate in Denmark for year-round use. So taking out a traditional loan is not possible with every type of real estate. For a houseboat, for example, a special boat loan must be taken out. If there are any specifics about borrowing for the property you want, you can find them on the page about the type of property in question.<\/p>\n

    If you are unable to meet the above criteria, or if you need a loan for a vacation property, you must apply to the Danish Ministry of Justice, which in turn will take into account other strong ties to Denmark. The processing time for the application is usually between 8 and 10 weeks.<\/p>\n

    What makes a real estate loan in Denmark<\/h2>\n

    Real estate loans are loans that are taken out for the purchase of a property, for example a house in Denmark. Such a loan is always based on a mortgage, such as a mortgage loan, a real estate mortgage or a bank mortgage.<\/p>\n

    As you may already notice from the different names of the mortgages, there are different companies offering real estate loans:<\/p>\n

      \n
    • Banks (bankers) are usually the best choice when it comes to a large loan, as they have longer repayment periods.<\/li>\n
    • Mortgage institutions (Realkreditinstitutter) offer the most favorable loans.<\/li>\n
    • Real estate loan companies or building societies (Ejendomskreditselskaber) usually have more flexible financing and can usually be processed more quickly.<\/li>\n<\/ul>\n

      Even though the three providers differ and fit different needs of the borrower:s, they basically offer different types of real estate loans:<\/p>\n

        \n
      • In the case of a fixed-rate mortgage (Fastforrentet obligationslan), the interest rate is fixed for the entire term of the loan.<\/li>\n
      • In the case of a mortgage with a variable interest rate, the interest rate can change every 1 to 3 years.<\/li>\n
      • With a short-term interest rate adjustment loan (Rentetilpasningslan med kort rente), the interest rate is fixed every 6 months on the basis of a reference interest rate.<\/li>\n
      • With a 3-year interest rate adjustment loan (3-arigt rentetilpasningslan), the interest rate is reset every three years.<\/li>\n<\/ul>\n

        If you want to learn more about the forms of real estate loans, you can find them on this website about finances in Denmark. As you have probably noticed, there is a special feature in Denmark compared to the German credit market: While in Germany a long fixed interest period of up to 20 years is normal, in Denmark the period is often only up to 5 years. You should therefore be very sure that you will be able to service the loan even if interest rates rise.<\/p>\n

        The process of taking out a loan in Denmark<\/h2>\n

        Once you have set your personal budget for the property in Denmark, start looking for a suitable provider. Depending on what needs and requirements you bring with you, you should take these into account when making your choice.<\/p>\n

        If you have chosen a bank, contact the bank of your choice to receive a loan application for your loan. It is common for Danish banks to lend up to three to five times your annual salary. Note that you should also bring equity capital with you in Denmark. For this, usually between 5% and 20% are usual. The more, the better your real estate loan conditions will be.<\/p>\n

        After you have submitted your loan application, the bank usually evaluates the property you want to buy through an appraiser hired by the bank. In the process, lending institutions want to find out how much the property is worth, since it serves as collateral for the eventual loan.<\/p>\n

        Next, your creditworthiness is checked. This happens on the basis of various factors, but usually your salary in particular plays a decisive role.<\/p>\n

        After the review, the credit institution makes you a binding offer, if it considers you creditworthy. Once you have found the right loan offer for you, you only need to sign all the necessary documents for the loan.<\/p>\n

        Of course, it is also possible to apply for a loan at a German bank. In this case, you have the best chances if you already own a paid-off property in Germany. It is best to speak directly with your bank.<\/p>\n","protected":false},"excerpt":{"rendered":"

        It is not uncommon for the purchase of a property to require the taking out of a loan. If you already live and work in Denmark, you may…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"\nBorrowing in denmark - chettioan.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/chettioan.com\/borrowing-in-denmark-10581.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Borrowing in denmark - chettioan.com\" \/>\n<meta property=\"og:description\" content=\"It is not uncommon for the purchase of a property to require the taking out of a loan. 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