If you do not have a savings or money from a home sale, a private loan can be a sensible solution to finance the payment on your new home.
As a buyer, you must set a minimum of 5 percent of the purchase price for your new home when you need a loan for a house. An amount that you cannot finance through a mortgage loan or a secured bank loan. Therefore, it requires that you have the money saved up or that you have funds from the accommodation you live in now.
But what do you do, if not?
Then you can take a private loan that you can use to cover the payout. But is it a good idea at all?
Payout to house – here is the expert’s best advice
We have got Jesper Schou-Nielsen, who is responsible for private loan at Hans Brinker, to give you the answer.
When you have to buy a home, you have to pay a payment. What options do you have to borrow for it?
“A number of loan providers offer private loans where the bank does not relate to the purpose.”
»It is possible in several places to borrow up to DKK 350,000, and in some places even up to DKK 500,000 on a private loan. This makes private loans a possible source for financing the “disbursement” on a home loan, as the home buyer himself has to provide at least 5 per cent of the purchase price that cannot be financed through mortgage or secured bank loans. “
Is that a good idea?
“It can be a very good idea. Private loans can often compete with secured bank / mortgage loans on the interest rate, and the relatively high possible loan amount on private loans can in many cases make it unnecessary to have to take a bank / home loan, which in some cases may be more expensive than a private loan. ‘
You then end up with three loans – at the bank, the mortgage bank and the loan for the payment. Is it risky?
“You do not necessarily have to end up with three loans because the private loan can potentially draw the bank loan and the payout so that you can settle for a private loan and a mortgage loan.”
“It is not in itself risky, as repayments on these loans are typically made via payment service / bank cover, and completely automatically. And it could be an economically viable alternative to a bank loan to look at a private loan instead. “