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Port Forward finance loans – Introduction
Introduction to the follow-on financing issues. What exactly is a follow-on financing? When will you use and what must be observed? Basic information and options to favorable interest rates for a future connection to secure financing.
Financing of real estate are usually very long closed. In Germany it is customary construction financing for a period of 30 years to calculate. It is within the total duration a rate for a specified period agreed, this is the usual way with 5, 10, 15 or even 20 years. By the debtor to be paid based on the interest rate on the date of the fixed market value.
After the phase of the interest rate must be re-negotiated, and for the next rate period set out in this case one speaks of the follow-on financing. At this time there are various options. Usually the credit institution shall submit an offer to continue the contract, the interest and the duration will again be established.
The debtor also has the possibility of his mortgage to another institution rewrite, if he then be offered better terms. This results in him by the Institute, with whom he discussed the original contract, no cost. Otherwise it looks when you try out a mortgage loan in advance in future. Actually, the only borrower in the sale of his property from his contract early, here is important to note that under the circumstances, an early repayment penalty is payable.
In periods of very low interest real estate, as the moment due to the global economic crisis is the case, it is worthwhile for everyone, at least on the terms of a forward loan information. This form of real estate loan is always then, if the long term with rising interest rates for real estate loans to be expected. With a small premium over the current market interest rates, one can in advance of favorable conditions for the future.