Very few builders can finance their planned property entirely with equity. As a rule, funding is requested from the bank for assistance, which in return requires a security for the borrowed money. As a safeguard, the credit institute receives an entry in the land register of the relevant property for its service and can dispose of the property should the borrower no longer be able to service the installments of the loan.
In the past, the financing of a property was usually secured by mortgage. Just like the land charge, it is entered in the land register. The mortgage is always linked to a loan and reduces with each payment until it is fully repaid and then deleted from the land register.
In return for the mortgage, the land charge exists completely independently of the loan, it falls and does not expire during and after the repayment. It remains in the land register. In contrast to the mortgage, it is up to the property owner here whether or not to have the land charge deleted.
The registration of a land charge has the advantage that it can be used again and again as security for further loans. The land charge is also more flexible because it can easily be transferred to a new lender, so that expensive notary fees and registration fees at the land registry are not required.
Nowadays people are still talking about a mortgage loan. Since the banks now almost only accept land charges for granting a loan, the term land charge loan would be more appropriate.
Contact Person:
OTTO STÖBEN GmbH Patrick Stöben, managing partner of OTTO STÖBEN GmbH
OTTO STÖBEN GmbH Schülperbaum 31 24103 Kiel
Office: 0431 664030 Fax: 0431 6640361 E-Mail: [email protected]
OTTO STÖBEN is a company with many years of experience in real estate management and eight offices in Schleswig-Holstein. As a fourth generation brokerage company, OTTO STÖBEN always combines this experience with fresh innovation.
Press contact:
IMAGE Marketing GmbH Adrienne Michel Königsweg 1 24103 Kiel
Office: 0431 66452-14 Fax: 0431 66452-22 E-Mail: [email protected]
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