Boost Your Property Purchase: 5 Equity Building Strategies
Buying a property requires careful planning, especially when it comes to financing. Our experts recommend covering 20 to 30 percent of the total costs with your own funds, known as equity. This not only reduces risk but also opens doors to better loan terms.
Equity can be built from various sources. These include savings, cash, building society savings (excluding loan amounts), life insurance policies, stocks, investment funds, securities, real estate, paid building plots, and even accumulated savings from a Riester pension.
To illustrate, accumulating 60,000 euros in equity can be achieved through monthly savings, with the time frame depending on your savings rate. This equity can significantly improve your business terms, leading to lower interest rates and monthly payments, and even help you become debt-free faster.
Five strategies to build equity include saving with government-subsidized housing schemes, critically reviewing private old-age provisions, considering private loans, accepting gifts or early inheritance, and saving interest through debt restructuring. Remember, knowledge about property financing is key to a successful home purchase. A high equity capital reduces financial risk, improves business conditions, and can make your dream of owning a property a reality.
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