First, it is necessary to describe the basic differences between the two types of building savings loans.
This is a significantly cheaper type, for which the saver must meet three conditions:
and / have saved a minimum percentage of the target amount, which is determined by the agreed tariff variant. It is usually about 40%.
b / at the same time the period of validity of the building savings contract must be at least 2 years
c / for both of the above conditions, the so-called “evaluation number” must also be met. This parameter affects the timeliness and amount of deposits, the amount of the target amount and, last but not least, the total savings period.
In other words, a bridging loan. The contract owner can apply for it immediately after the conclusion of the building savings contract. All he needs is a minimum amount of savings, in the order of hundreds of dollars. This type of loan is relatively expensive, but in some client cases the only solid solution. After repaying such a loan, you are already waiting for the conditions for the so-called regular loan – this time is known from the calculation that his financial advisor prepared for him before signing the loan contract.
The most common uses of building savings loans
1 / Purchase of property (flat, house, building land)
2 / Refinancing the existing home loan
3 / Reconstruction of a residential property
4 / Construction
5 / Repayment of previously paid funds
6 / Settlement of property relations
Choosing a suitable building society
The suitability, possibility and possibly the choice of building society should be discussed in detail with a financial expert. If such a person represents one financial institution, it is good to secure the offer of other companies. The differences are very significant especially in the area of future credit.
The ideal option is to use the financial services provided by a comprehensive financial advisor who conducts such a selection process on behalf of the client – free of charge as a standard. Such an advisor will then also provide the client with administration with the establishment of the contract and subsequently with the entire loan.
Today’s offer of building societies is very wide and the differences in interest rates and conditions for obtaining a loan are clear. The search for the most advantageous loan consists in finding an advisor who does not represent any savings bank. On the contrary, it has information from the banking market and is able to represent its client’s interests in the unilateral offers of representatives of individual institutions. They will find out what the prospective applicant expects and what possibilities they have. On this basis, it will select the most appropriate form of financing for the whole project.
Loan repayment period
The loan repayment period is usually not dictated by the contract owner, but usually depends on the savings bank’s tariff. However, it depends not only on the amount of the installment, but also on the interest rate.
This area is quite complex and it always pays to consult everything in advance with a financial expert. Given the higher interest rates on both intermediate loans and regular loans, the ” Mirror Mortgage ” system is rarely worthwhile. Any suitability should always be consulted (not only in building savings) with an advisor.
Practical example: Reconstruction of the house for 600 000 USD
Mr. Adam asked for a consultation on the need to finance the reconstruction of his house in the amount of 600 000 USD. He did not want to stop the property and both had a long-term building savings contract with his wife. The rate of these contracts offered them an interest rate on the loan of 2.95% pa guaranteed throughout the repayment period. In addition, the Horský family paid off the loan by using the Mirror Mortgage concept. Thanks to this system, the savings in their case amounted to almost USD 20,000.
Benefits of meeting a comprehensive loan specialist
- Non-binding and free consultation
- Find all energy saving options
- Settle administration in one place
- Discuss possible combinations you will save on
- Calculate multiple banking houses for easier orientation without losing your precious time
- Select the bank that best suits your requirements
- You do not have to circulate the banks and find out the differences and make a difficult analysis