Investing in real estate is something that many people want to do. This, of course, has everything to do with the relatively limited risk and the good chance of increasing your capital. However, it is important that you have enough money available to make this real estate investment. Not everyone has sufficient savings to be dependent on someone else. A much more obvious option then is to make use of real estate financing.
In this article, we discuss the real estate financing of the moment. We will go through the methods you can use to get enough money. You will be able to get started fairly quickly on the basis of this information.
Top 5 real estate financings of today
Since there are several options, let's go through them all. You will then get a good idea of how to go about this yourself. In the end, it's all about finding a solution to your current situation. A solution that allows you to make use of the many advantages of a property investment. Let's take a look at the top real estate finances one by one:
#1: Bullet Credit
In many ways, a bullet loan is an interesting form of property finance. It is a construction in which you borrow money and only have to pay the interest on it every month. This makes it a mortgage loan with relatively low monthly costs.
However, you should be aware that at the end of the term, you will have to repay the loan amount in one go. However, this is not a problem if the real estate investment has yielded a nice sum in the meantime. Moreover, there is always the value of the property that you can call upon.
So, in your situation, do you need a loan with low monthly costs? And do you not want to have to draw on your entire capital at once? Then a bullet loan is an interesting option to consider. Keep in mind that the interest rate is relatively high.
#2: Fixed rate loan
Another form of property finance that you have the option of is the fixed rate loan. For example, you borrow a certain amount from the bank to purchase a property. Since the bank will not lend you money for free, you will have to pay interest on the amount borrowed. With a fixed rate loan, the interest rate is fixed. During the term of the loan, it is not possible for the interest rate to increase or decrease.
With a fixed rate loan, you pay the same amount every month. This consists partly of repayment and partly of interest. The loan runs until you have repaid the full loan amount + interest to the bank.
Such a loan provides stability. You do not have to worry that the loan will be adjusted upwards over time. On the other hand, you do not take advantage of a potential interest rate cut. You minimise any risk.
#3: Floating rate loan
At the same time, there is also the variable rate loan. So again, this is a way to get extra money for a real estate investment. It is a widely used form of real estate financing. Unlike a fixed rate loan, a variable rate loan varies in interest rate. During the term of the loan, it is possible that the interest rate will be higher or lower.
This form of loan can be seen as more risky. You do not know in advance what the interest rate will do. It is possible that the interest rate will suddenly be much higher. You will then spend more money on your loan. The downside, of course, is that the interest rate will be lower and you will save a lot of money. In the end, it is the risk you take.
The monthly amount that you repay to the lender consists of the repayment amount + the variable interest.
#4: Mortgage loan
A fourth form of property finance is the well-known mortgage loan. With this type of loan you choose to take real estate as collateral. This form of loan is possible, for example, when you invest in a house or flat.
The difference with a bullet loan is that with a mortgage loan you simply pay off part of the borrowed capital every month. And on top of that there is the interest amount. The advantage of a mortgage loan is that this can often be a considerable amount. This has everything to do with the potential value of the collateral.
Finally, with all these types of loans, you have the opportunity to visit several banks. You will soon find out who offers the best conditions. Never accept too quickly the conditions of one lender.
#5: Immotokens
A final real estate financing option that should certainly not be overlooked is investing in Immotokens. This innovative method has only been around for a short time. This automatically makes you one of the first to use it.
Immotokens are a digital representation of physical properties. Using the blockchain, it has been established that Immotokens represent the (partial) ownership of a property. This means that you don't have to worry about the hassle of investing in property. All you have to do is invest in the Immotokens.
Investing in Immotokens, for example, is possible from as little as €50. This means that you do not need to borrow any money at all, but simply use your current capital. At the same time, you will receive rental income and the value of your Immotoken will increase. All of this is in proportion to the part of a specific property that you are now the (co-)owner of.
So you just want to get started with your own money, without having to deal with complicated property finance? Then discover today what Immotokens has to offer you. The many advantages of this method speak for themselves. It is becoming a more popular option by the day!
