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“Best agers” instead of grandma or grandpa: retirees are fitter than ever – and they want to enjoy the last third of their lives. Many of them own their own property, but with a small pension no big leaps are possible. If you want to monetize the property, you don’t have to sell it: Seniors can also take out a mortgage on the property. And more and more popular: more than three times as many people over the age of 60 used this type of capital procurement last year than in 2010.
According to Udo Zimmermann, specialist in building finance for Dr. Klein in Buchholz, more and more owners of retirement age are looking for a way to fulfill their special wishes – be it travel, larger gifts for the children or extensive modernization measures: “While people used to save and inherit as much as possible, I am now watching that Trend to enjoy life in old age. And also spend money on it. ”When they ask their house bank whether they can borrow on their property, seniors often hear:“ At your age this is no longer possible. ”Smaller regional banks in particular interpret the residential property credit guidelines from 2016 very strictly and grant older customers no more building loan.
Borrowing often makes more sense than selling
A common model is the life annuity, in which the current owners sell the property and receive a one-off payment or a pension – in some cases including a lifelong right of residence. “In some cases this is a good solution,” says Udo Zimmermann, “but this model only pays off relatively late. Those under the age of 75 usually only receive small amounts. ”The construction finance specialist also advises against a partial sale in which part of the property remains in the possession, because the models are often complex and the costs are not always transparent. His recommendation: to question the statement of the house bank. Because there are certainly credit institutions that give older customers a loan on their property – sometimes even if it has not yet been fully paid off. The advantage: the property remains in the possession and the current wish can be financed.
Not all banks have an age limit
According to Dr. Udo Zimmermann, older borrowers also have the option to lend their property. Little known. “Many people do not inquire about a rejection from their house bank and leave it at that. But we work with a lot of banks and we know some who make this possible. Therefore, it is not age that is the limiting factor, but the bank’s debt service bill, ”explains the mortgage specialist. The income must exceed the expenses – including the monthly installment to be paid. For example, he recently brokered financing for a rental property for a customer over 80 and enabled cruises for an older couple that would not have been possible with the regular pension.
Low monthly rate and long term
Exactly what the loan looks like depends on the wishes and plans of the property owner. Fixed interest rates between 10 and 20 years are common and the loan amount is usually between 50,000 euros and 250,000 euros, in individual cases even more. According to Udo Zimmermann, low monthly payments are important to the majority of older customers – and they are also realistic: “With a repayment of between one and two percent and low loan-to-value ratios, the owners currently receive an interest rate of around one percent, sometimes less.” Loans with a total term that far exceeds the life expectancy of the borrower is no problem for the financing banks – because the property serves as security for them.
Eliminate risks
Solid financing is important so that the procurement of capital remains risk-free and the property does not have to be sold unplanned. However, this does not distinguish the raising of capital from initial or follow-up financing, according to the specialist at Dr. Klein: “We generally don’t sew up loans, but pay attention to secure solutions. It is also important to me that the customers make a very conscious decision and know what they are doing – but of course this also applies to all other financiers. ”If the property is mortgaged relatively high, Udo Zimmermann always recommends that the future heirs be on board and to discuss the plan in the family council. “I often hear that the children are not very interested in the property anyway and are happy for the parents, who can use it to fulfill their wishes,” is his experience.
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