Prepayment right for real estate loans
When does the special termination right in real estate financing no longer apply? It does not matter whether it is a real estate loan, a mortgage or a car loan. You want to make use of your associated special right of termination?
Real estate loans: Special right of termination in case of changes to the general terms and conditions
Dear lawyer, dear lawyer, dear lawyer, we have 2 real estate loans with different banks. The two loans are secured by land charges and remain subject to fixed interest rates. Recently, we have obtained from both banks a “change in the terms and conditions until 21.03.2016”. The letters include the following note: “As stated in Section 1 (2) of our Terms and Conditions, your consent to the above additions is given if you do not notify us of your refusal prior to 21 March 2016.
The existing framework agreement with us on payment services may also be terminated without notice prior to 21.03.2016 and free of charge “their offer.” We could replace the smaller loan immediately, for the bigger one we would now have better terms or a fixed rate. Can the two loans be canceled or rescheduled due to this change, also in connection with a possible early repayment penalty?
What would be the consequences if we contradicted the change? Make your request now and receive a legally binding response from a lawyer. The framework payment services agreement relates only to the conditions for the payment transaction and the management of a payment account, but not to the credit agreement. Therefore, you can not cancel the loans with reference to the GTC change.
In answering your question, I hope I have given a clear answer and thank you for the trust placed in me. Did the lawyer help you? To what extent was the lawyer comprehensible at all? How was the lawyer nice? Do you recommend this lawyer to anyone? “Lawyer’s explanation” Clear and understandable formulation “:
Termination right Mortgage lending Archive – Mortgage lending – House financing
The one who wants to buy a property today, has favorable lending rates with five- or ten-year fixed interest. The current interest savings can result in a cost-intensive financial solution after the end of the commitment period. For real estate owners who can repay large amounts during the life of the loan or repay a large portion of the loan after the end of the fixed interest period, fixed interest rates of up to 10 years are reasonable.
If you also start to want to sell the property during this time, a shorter fixed-income period is the best time. The fact is that the interest rates for real estate financing are at a low level. If you want to repay your loan with an initial repayment of approximately 5%, you should opt for a full repayment variant.
Thereafter, the loan volume would be repaid in full and those who have set the rate of return for the whole duration will have no risk of interest rate changes. But what about building owners and real estate buyers who could not afford a five percent repayment? Standard solutions with a 15-year fixed interest period and more or less large residual debt are just the second option here.
This means that even those who repay only with an initial repayment of 1% pa, can get a fixed interest rate for the entire duration. These were real estate loans with corresponding fixed interest rates. A lending rate of 3.34% pa is payable on a loan with a fixed interest rate of 10 years. By contrast, a loan with a fixed interest rate of 30 years would account for 4.22% pa of the lending rate.
If you compare the two offers, when would the long fixed interest period pay off? At the end of the 10-year fixed interest period, the loan volume would still have a value of around EUR 155,432. If the subsequent interest rate does not rise above 5.35% pa, the 10-year fixed interest period is the appropriate period. However, looking at the nature of the interest rate on loans or inquiring from older owners, one quickly concludes that there was a time when we were well over 5.35%.
In particular, real estate owners, for whom the monetary interest rate is also something of the maximum burden they want to impose on their household, would do well to take appropriate precautions here. The procedure is very simple: as shown in this example, choose a fixed rate that reduces interest rate risk to zero.
Special repayment options can be arranged, as well as changes in the repayment rate are possible. In addition, you have a statutory special right of termination of 10 years after full payment. You can also dissolve a document fixed for 15, 20 or 30 years with a notice period of 3 months. Conclusion: A long fixed interest period gives you investment security, flexibility and currently favorable conditions.
Long fixed interest periods should therefore always be the first address, as they allow you to calculate your charges over a longer period of time.