Chinese income can be loaned up to 70% of the property price in Germany. The procedure is very simple.
Loan institution
Dental Association Nordrhein
Form of payment
100% payment (all loans are to the borrower)
Lending interest rates
3.98% (if the loan amount is 54% of the property price) When the loan amount is 70% of the property price, the calculated interest rate is 4.08%.
Repayment rate yearly
Minimum 2% (maximum 10%, it can be reset once a year, the bank will charge 150 Euro to reset the rate.The repayment rate remains the same until it changes again)
Repayment time
End of each quarter (March 31, June 30, September 30, and December 31)
The bank will automatically deduct money from the account provided by the borrower.
The bank will automatically deduct money from the account provided by the borrower.
Calculated interest on a loan
After signing the loan agreement, you need the developer’s bill to obtain the loan (after down payment has been made). Interest is required from the beginning of the loan. The interest amount is decided by the total amount of the loan. The principal and interest will be repaid quarterly after the full loan amount is given. When the loan can be given all depends on the speed of the developer, the bank cannot intervene in the process of the land office.
Additional repayment After the full loan amount is given, the borrower has the right to make an additional repayment once a year. Each repayment is up to 5% of the total loan amount, and the additional repayment can only be made in the next quarter after the borrower has got the loan. Repayment time is at the end of any quarter. Additional repayments where not made in the previous year cannot be accumulated to the next year. The borrower needs to take the initiative to transfer the money to the bank, and write the loan agreement number + Sondertilgung in the detail of the payment. After receiving the repayment the bank adjust the repayment plan.
Generally, the loan agreement is valid for 10 years, and the interest rate remains unchanged. After 10 years, the borrower can choose to make a new loan agreement with a new interest rate, or change to another bank, or pay off the remaining amount at once. If the borrower wants to pay off the loan ahead of schedule, he also needs to pay a fine which is at least all the interest that will be paid in 10 years.
Monthly payment calculation
Loan 50%: Loan amount* (2% principal + 2.85% interest) ÷ 12
Loan 70%: Loan amount* (2% principal + 2.92% interest) ÷ 12
Loan 70%: Loan amount* (2% principal + 2.92% interest) ÷ 12
Documents required from borrower
1. Copy of passport and the last page with signature
2. The English version of the payroll with company stamp for the past three months, or a proof of employment with company stamp (including the employee’s name, Passport number, position, entry date, salary before and after tax)
3. Copy of the front and back of a German bank card
2. The English version of the payroll with company stamp for the past three months, or a proof of employment with company stamp (including the employee’s name, Passport number, position, entry date, salary before and after tax)
3. Copy of the front and back of a German bank card
Explanation of five forms
There are five forms the borrower needs to fill out and sign.(The signature should be same as the passport signature)
Form 1: Kontoverbindung Bank account of the borrower
Loan debit account, which will be deducted at the end of each quarter.
Form 2: PEP
Politically exposed persons This table is to show that you are not entrusted with a prominent public function.
Form 3: Wirtschaftliche Berechtigung
This form means that you follow your own wishes and no one forces you.
Form 4: Darlehensantrag
Loan application form. The information of the apartment and property have to filled in the form.
Form 5: Selbstauskunft
Personal financial statement, please fill in according to our template.
Loan process
1. Provide personal documents (passport, payroll, bank card, certificate of bank asset) + 5 forms + property materials
2. Loan assessment (one week upon receipt of the full application documents)
3. Real estate appraisal (2 weeks)
4. The letter of intent (valid within 5 days, send a signed copy to the bank)
5. Formal contract (valid within 4 weeks)
The borrower needs to print out the complete contract, single or double sided, and sign at the places that we marked. The original signed contract needs to be sent to the bank within 4 weeks.
2. Loan assessment (one week upon receipt of the full application documents)
3. Real estate appraisal (2 weeks)
4. The letter of intent (valid within 5 days, send a signed copy to the bank)
5. Formal contract (valid within 4 weeks)
The borrower needs to print out the complete contract, single or double sided, and sign at the places that we marked. The original signed contract needs to be sent to the bank within 4 weeks.
Loan calculation summary table
Note: The article is provided by professional mortage broker, Mrs Ning. Depending on the individual situation and bank’s assessment, the loan calculation maybe different.
