Please note, that there are only full status mortgage facilities currently available FOR EMPLOYED APPLICANTS ONLY, who are living and working in either UK or Ireland (and appear on that Country’s Electoral Roll) OR non-German Nationals living and working in Germany.
All loans - max 70% of the Purchase Price - need to be supported by a minimum requirement of proof of income, i.e. copies of your last three month's payslips & copies of your latest P60/Employer’s Reference together with copies of your last 3 month’s Personal Bank Statements will be required
Your loan is based on your joint net “take home” pay and is calculated on an affordability basis. All your existing liabilities including any mortgage/rent payments, personal and bank loans, credit card balances and any maintenance (ie: Divorce) payments together with your proposed German mortgage payments must not exceed 35% of your net monthly income.
Rental Income of the new property will be taken into account, but only if there is an existing Rental Contract in place and if yes, up to 80% of that Rental Income can be added to your Earned Income when calculating how much you can borrow.
Example:
Net joint monthly income £ 2,500 times 35% of that figure is £ 875 minus existing monthly mortgage payment £ 500 – No other liabilities. This leaves a balance of £ 375 for a proposed German Mortgage payment.
Essential notes for purchasing a property in
Germany
- Please ensure that you will have full title to the property on completion and that the appropriate documents are available for the lender.
- With new properties, find out the date the property will be registered in your name(s), as the lender cannot lend on the security of the property until it has been registered.
- Whilst all reasonable steps will be taken to secure the loan on your overseas property as soon as possible, delays may occur due to the German legal and administration system.
- Check with the estate agent/lawyer that you are aware of the costs charged by the legal & government authorities for purchasing a Germany property, noting that the lender will have their own legal costs for assigning the loan (the cost of which they will normally advise when they issue the mortgage offer).
- It is essential that you take the appropriate independent legal advice before making an offer on a property, as this is done in writing and once it is signed it is legally binding.
- Please also note that a ‘Power of Attorney’ may be required by the lender and we also advise you to make the necessary arrangements etc.
- Please be aware that the Lawyer/Notary may be incorporating within his charges, costs for assigning the mortgage and you should establish with the Lawyer/Notary the actual cost before proceeding with a loan application.
- It is extremely advisable to arrange your mortgage finance before agreeing to purchase a property, as once entered into you are legally bound to purchase.
- A German bank account will be required.
- All mortgages should have a suitable life assurance policy assigned to them. It is not mandatory but strongly advisable.