Online Mortgage Financing With and Without Equity and Subsidies - Laura.AI

Many families dream of owning their own home. Thanks to currently low interest rates, buying or building your own property can be realized very well right now. But what steps need to be considered in a financing project? And to what extent are there opportunities to get closer to the dream of your own home thanks to digital tools? We addressed these and other questions and found an answer after more than a year of development that brings together the worlds of mortgage financing and digitalization in a completely new way: Our Robo Advisor Laura AI

How Does Mortgage Financing Actually Work?

Basically, every customer faces the same question before purchasing a property: Can I afford this property and if so, how? To answer this question, you typically go through a process that is always the same in its basic features: In the first step, you find a property, e.g., on one of the real estate portals like Immobilienscout24 or Immowelt, that you are interested in. Then you check how much equity you bring to the financing project and determine the monthly sum available through a household or liquidity calculation that can be put into repaying the loan taken out. In the next step, you should inform yourself about hedging to minimize potential risks, e.g., from interest rate increases after the fixed-interest period. In the last major step, you should inquire about which subsidized loans are available. Such subsidized loans can, for example, reduce the interest rate risk through long fixed-interest periods or generally enable the taking out of part of the loan amount at favorable terms. Once these steps are completed, nothing stands in the way of a financing concept.

And Where Will Laura Help You in the Future?

This fundamentally always very similar scheme of mortgage financing enables our Robo Advisor Laura to accompany and support you along the way. But from the beginning. In which step will you be supported how in the future?

Finding and Defining Property

The most common way to find a house, plot of land, or apartment that matches your own ideas leads via one of the numerous real estate portals like Immobilienscout24 or Immowelt. Once you have found your dream property, you simply copy the address link in the internet bar (e.g., www.immobilienscout24.de/expose/12345) and paste it into the input field at www.jetzt-baufinanzieren.de. Laura then starts evaluating your property so that your financing project relates specifically to your dream house. Laura considers not only the main costs like house and purchase ancillary costs but also determines additional expenses like broker fees or property transfer tax. If you have already saved up a certain amount of capital over the past years (equity), you can simply enter this sum in your basic data, and Laura has already set the framework conditions for your financing.

Your Financing

As described above, the household or liquidity calculation forms the basis for your monthly repayment rate. Based on the people living in your household, Laura generates an individual proposal for estimating your monthly expenses. If you want to personally compare your income and expenses to determine your monthly available sum for loan repayment, you have the option as an alternative to Laura’s suggestions to go through the household calculator position by position. This gives you an even more accurate overview of what your income and expenses actually look like and what opportunities this opens up for you. The result of the household calculator is the monthly surplus. You can simply take this surplus with a click and use it as your desired rate for your financing. With this desired rate, you have already arrived at the main part: your personal loan calculator.

The loan calculator gives you an overview of the entries determined by you and Laura so far (house price, purchase ancillary costs, equity, desired rate, …). Building on this, Laura designs a graphic showing the remaining debt curve, i.e., the remaining debt of your loan at any point in the financing. As with any financing, you also have the option here to choose between different fixed-interest periods (e.g., 5 or 10 years). The interest rate is linked to this term and immediately shows you the effects of your selection in your remaining debt curve. As a very special feature, Laura even recommends a minimum rate, i.e., a rate level that you should not fall below, as the financing could otherwise prove very risky due to a possible change in the interest rate after the fixed-interest period. This risk from potentially higher interest rates after the fixed-interest period is called interest rate risk. But Laura also has an answer for you here.

Hedging

The currently low interest rates mentioned at the beginning are tempting to fulfill the dream of owning your own home. But what will it look like in 10 or 15 years when the fixed-interest period ends and the remaining loan is re-rated? Nobody knows. However, what effects an interest rate change can have on your project and how you can counter this risk is known. Laura gives you a detailed explanation of interest rate risk and gives you the opportunity to simulate different interest rates. This way, you immediately see what impact an interest rate increase of 2 or 3% could specifically mean for your project. An interest rate increase can then have an effect in two different ways: Either you want to keep your desired rate, which would result in an extension of the term, or you want to finish within the same time as with constant interest rates, which would result in an increase in the rate. To not have to be afraid of interest rate risk, Laura shows you various measures to minimize this as much as possible. By means of a building savings contract that secures favorable terms for the future, or long fixed-interest periods that are also available through subsidy programs like the Kreditanstalt für Wiederaufbau (KfW), you prevent this risk. Laura gives you precise explanations of the function and effect of these financing instruments and explains to what extent these measures are useful for your project.

In addition to the interest rate risk calculator, our RoboAdvisor also offers you the opportunity to inform yourself about damage cases and flexibility. The former gives you an overview of possible damages such as burglary or liability damages and shows you ways to prevent these events. In contrast, unexpected financial opportunities can also arise during financing, such as gifts or Christmas bonuses. Laura shows you how you can specifically incorporate such financial flexibility into your financing.

Subsidy Options

In addition to the classic bank loan, subsidies are ideal combination elements for your financing. Favorable interest rates, long terms, repayment-free initial years, and high grants make subsidies the perfect instrument for cheap and above all secure financing. Compared to lesser-known subsidy options, such as those from the Federal Office of Economics and Export Control (BAFA) or the Bavarian State Mortgage Bank (BayernLabo), Riester pensions and the KfW loans already mentioned above are optimal financing components. If your project emphasizes energy efficiency, whether in a new build or when renovating an existing property, Laura helps you identify suitable subsidized loans and add them to your financing concept using a short KfW questionnaire.

Customization and Creation of Your Personal Financing Concept

Not every financing concept fits everyone. That’s why you now have the opportunity to individually include the just processed KfW loans, the bank loan with the term you selected, and the building savings contract financing component in your concept. Once you have decided, you can create your personal financing concept with one click. Laura has then created 3 different financing concepts based on your individual inputs, in which the different financing components interlock in different ways. If you like the concepts, you can now simply forward them with a click to your branch and your local advisor and arrange an appointment. The advisor can now optimally prepare for your project and compile the necessary documents.

Your Benefits Through Our Robo Advisor Laura AI

Laura enables you to inform yourself about mortgage financing completely independently from home. Graphics on loan progress and the combination of different financing components give you a completely new view of the possibilities of how you can realize your dream of owning your own home. The interactive chatbot supports you with suitable suggestions for your personal financing. Try out different financing scenarios and choose your individual concepts. Once you are satisfied with your project, the specialists at the bank look forward to the personal conversation with you. Just try it out at www.jetzt-baufinanzieren.de.