Real Estate Finance

September 7, 2015


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What is to be observed for loans with discount who want to borrow money at a bank to invest it in real estate or the construction of an own home, which a loan at a discount is offered by the financial institution under certain circumstances. The real estate portal reported, what is this funding and what the borrower should pay attention. A discount is a discount, which is calculated on a loan. Specifically, this means that a part of the loan amount to the borrower is paid off. Interest is the total amount of credit. From 100 euro only 93 euros to the borrower will remain so at a discount rate of 7 per cent paid, 7 euros at the Bank. The borrower has to pay back the entire 100 euro plus the agreed interest. The discount is calculated in this variant as a kind of already accomplished redemption.

Therefore, the effective interest rate on a loan with discount are mostly relatively small. Consideration of borrowing, just not the whole sum will be disbursed. In any case, the recorded credit is so higher than the amount actually required. Those interested in corresponding offers always in mind should have this fact. The discount offers but tax benefits, if real estate for rent to be financed with the loan. In this case, the discount can be used off the tax as advertising costs. Self-occupied real-estate this is no longer the case since 1996. More information: Unister GmbH Lisa Neumann