Mortgage loan

The mortgage loan is a slightly different way to raise a few euros in the short term, if it gets a little short. It is ideal for bridging short-term financial bottlenecks, is easy to complete and usually goes on the stage quickly and unbureaucratically. Often, not even salary statements or even information about the financial situation is needed, because since it is a mortgage loan, a security is offered, which can be accessed by the lender with repayment problems.

Loan settlement

Loan settlement

All this goes along with the right things, because the settlement is regulated by law, as are the interest and fees. Nobody needs to worry about being pulled over the table by a loan shark, just because it’s a mortgage loan. The prerequisite for this, of course, is that the mortgage loan should also be visited in accordance with reputable homes. And there are about 200 private mortgage lending companies available throughout Germany that are affiliated to the Central Association of the German Mortgage Lending Industry.

The mortgage loan is created by the customer depositing a security of value in the pawn shop. This can be jewelry, precious metal, watches, precious stones, value-resistant porcelain, a hi-tech system, or even a car or its motor vehicle letter. The acceptance of the pledge is at the discretion of the pawn shop, as many have specialized in a particular category of goods in order to better sell the pledge if the loan is not repaid.

Loan amount

Loan amount

The amount of the loan, of course, depends on the value of the asset to be lent. A £ 500 worth of watch will not be enough to land a £ 10,000 credit. As mortgage loans are short-dated, they have a normal life of only 3 months. However, the term may also be extended if the customer so wishes and the corresponding interest and fees for it. These are usually 1% per month. Incidentally, the fees have been fixed by the state since 1961 and have remained unchanged ever since. In addition, there is an additional charge for the storage of the pledge and the loan settlement. If the loan amount is repaid, the customer receives his pledge again.

At 1% interest a month, it may seem that the mortgage loan is far less favorable than the installment loan. However, since it is short-term, to bridge short-term liquidity shortages, it is in the end rather cheaper, and less complicated anyway.

Although most pawns are picked up by the owner, and less than 10% remain in the pawn shop, pawnbrokers turn out to be very attractive sources of income. 

How to save for a house

 

How difficult it is to buy a house, right? A few years ago, in the real estate bubble, the houses were at prohibitive prices and now that they have gone down (although not equally in all areas) the banks do not give mortgages. So how to save for a house?

It is really complicated in today’s world to own a home. There are many expenses and income cannot cover everything. However, as with everything, it has a solution.

In today’s article I want to see a series of tips that, I think, will be useful if you want to buy a house or plan to do so in the coming months or years .

There are the typical tips on how much to ask for a mortgage, how to negotiate, how much money you have to have saved, etc. About this there is already a lot of information and very good by the way .

In this article I want to look at this problem and give a series of different tips. At least that is my intention and you will tell me if I have achieved it or not in the comments.

How to Save Money to Buy a House

How to Save Money to Buy a House

Here we are going to see an action plan composed of a series of steps focused on buying a home without ruining the process.

Get more from yourself

Leave your ego at the door. Fact? All right. This may seem somewhat arrogant advice but it is the truth. If you really want to buy a home you will have to do things that you may not even consider right now .

Make important sacrifices such as stop buying that gadget that you ” need ” so much or maybe spend a couple of years without going on vacation beyond visiting relatives. Not forgetting that beers with friends for a while will be a thing of the past. Or roll up your sleeves and start putting your finances in order. See what you spend more on and where you can trim to the last cent.

You have to abandon your preconceived ideas at the door and don’t just say ” No, no, that doesn’t work for me ” unless you have tried seriously.

Find the cheapest accommodation you can stand

Getting to save to buy a home means living during that period of time in a cheap place . A place where you are comfortable, have a minimum of habitability but in no case luxuries. Are you saving to buy a home remember?

Perhaps your first reaction when the house where you are going to live for a few months or years is ” Here I do not live or die ” but, as I said before, you will have to make sacrifices and have an open mind.

If you live in a more expensive place, it will take longer to save the money you need and you will enjoy your home for less time .

Learn and practice saving in all dimensions of your life

You may think that it is nonsense to spend time doing something that will only save you one or a couple of euros but if you do it in everything you will see how, little by little, money is accumulating and you save more and more.

Try to always use public transport instead of the car. Do not leave electrical appliances on standby. Change the bulbs to low energy ones. Find free leisure and fun ways. Don’t stop drinking coffee going to work, better at home. Do not buy books, use your library.

Build an emergency fund

Build an emergency fund

The emergency fund is here, a classic. And it is that an emergency fund can help you a lot to buy the house you want.

Dedicating a portion of your savings to creating an emergency fund, even for a couple of months, and depositing it in a savings account, will mean that if something bad happens you don’t have to throw out a credit card or have to ask for a credit. And this will cause you to lose a lot of ground, maybe in a definitive way.

Once you have your emergency fund of 2-3 months of expenses, leave it in the savings account or in the fixed-term deposit and see how interest accrues.

Build this emergency fund before doing anything else and if you need to use it, make sure you leave it as it is before continuing.

Pay all your debts before

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Paying for housing is going to be a huge monster so you need to get rid of all your previous debts so you can focus on this great debt that lies ahead.

Nowadays the banks have raised the requirements to grant a mortgage a lot, so if you go with debts it is difficult for them to give it to you. But maybe the bank clerk tells you that because you don’t put the debt into the mortgage.

It may seem like a good idea but you will only get more long-term debt and pay a higher amount of interest. Do not run, if you do things right you will achieve your goal without needing to borrow more.

Focus on your goal

Without debt, with a cheap lifestyle and an emergency fund created , it’s time to focus on saving to buy your home.

Find the house where you want to live, see how much it costs and decide when you want to buy it. Now you just have to divide what the house costs between the months and save each month, without exception, the result.

Accumulate the money and leave it in a savings account or in a fixed term deposit so that the interests shorten the waiting time and help you.

Stay motivated

This tip may be the most important. Saving to buy a house requires time and sacrifice so any help is little . Above all psychological.

Put the photo of the house you want to buy in visible places, which serve as a reminder and motivation. You can also use a progress bar that you will cross out or color as you get closer to your goal. Or whatever else you can think of.

Following these steps you can buy the house you want. It is not easy clear but with patience, perseverance and a good roadmap is possible.

Foreign currency loans

The court of first instance upheld the ruling of the court of first instance in the foreign currency-credited litigation of Good Finance Insurance Bank, Which ruled at second instance that the general terms and conditions of the bank were unfair.

Plaintiff’s financial institution to pay

Plaintiff

In a ruling issued in Good Finance on Wednesday, the court also ordered the plaintiff’s financial institution to pay HUF 380,000 plus VAT to the defendant’s Hungarian state. The judge referred in his reasoning to the ruling of the European Court of Justice that the principle of transparency should be interpreted broadly, as the consumer is at a disadvantage with regard to the level of information with the financial institution.

Unilateral contract modification

Unilateral contract modification

Therefore, when examining the criteria of clarity and clarity, not only should they be considered grammatically comprehensible for the consumer, but also whether the contract makes the operation of the unilateral contract modification mechanism transparent, the consumer should be able to to consider the economic consequences, the judge noted.

The judge pointed out that, when reading the terms of the contract under investigation, the consumer was obviously not in a position to check whether a unilateral contract amendment was warranted, nor did he make the specific operation of the mechanism transparent to the consumer.

Financial institutions

Financial institutions

Concerning the Code of Conduct, which was specifically referred to in the appellant’s appeal, the court noted that the court could review the nullity of the conditions for a unilateral amendment of a contract contained in a code of conduct adopted by financial institutions.

According to the explanatory memorandum, the Code is not a legal act, but a useful agreement that lays down the rules of conduct for a given commercial sector. On the other hand, the court does not apply to the court as a mandatory provision, the judge noted. Compliance with the code in the asphalt list does not preclude a court review of unfair terms, Good Finance said.

Good Loans – Leasing Litigation Delayed

The Metropolitan Court of Appeal delayed the announcement of the second instance judgment on April 7 in a lawsuit filed by Good Lender Insurance Company. Against the Hungarian state regarding the fairness of its forint loan contracts.

The court also rejected the leasing company’s application to initiate constitutional court proceedings.
GLIC leasing has appealed against a first-instance ruling in February, in which the court found unfair and therefore invalid contractual clauses in leasing contracts that allow for unilateral changes to interest and lease payments.

Modify the lease payment by adjusting the reference rate

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According to the applicant’s financial institution, the lessor is entitled to modify the lease payment by adjusting the reference rate if the reference rate exceeds the contractual threshold. According to the applicant, the change was automatic, since the lessor could only adjust the remaining lease payments according to the change.

Does not qualify as an unilateral increase in interest rates

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According to the leasing company, this procedure does not qualify as an unilateral increase in interest rates, and therefore the general terms and conditions are not subject to the law either. The leasing company claims that the Court of First Instance’s finding that the litigation provisions are not independent and unfair is incorrect.

The change in the purchase price of the leasing asset, the increase in purchase costs and the need for financing do not qualify as statutory fees and interest increases. In its defense, the defendant requested that the first instance judgment be upheld and that no constitutional proceedings be instituted.

Do not correspond to the reference interest rate

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He argued that contractual clauses do not correspond to the reference interest rate, are considered to be genuine unilateral contract modifications and are not automatic in their effect. It added that the applicant had generally set the reference rate, which was freely adjustable, as well as the base rate, set by its own group of companies, and was entitled to unilaterally alter that rate. Thus, the plaintiff had unilateral authority to determine the level of interest and lease payments, according to the defendant.

Foreign currency loans – capital debt and interest rates on loans fall sharply

As a result of the bills on forint conversion and fair banks, the debt of foreign currency debtors and interest on loans will be greatly reduced, the Justice Minister said in a joint, joint debate in Parliament on Friday.

Prevent the social problem of foreign currency lending

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Sean Cole said that the purpose of both bills is to prevent the social problem of foreign currency lending from developing once again. He indicated that he was aware that there was a controversy surrounding the conversion to near-market exchange rates. According to Sean Cole, the government is bound by a ruling of the Constitutional Court  on the exchange rate and a unity decision of the Courthouse, and if the exchange rate had not been set, there would be a risk opposite.

Exchange rate risk is entirely borne by the debtors

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Good Finance have ruled that the exchange rate risk is entirely borne by the debtors, and that  is required by law to modify the contract in a manner that is in the best interests of both parties.
According to the minister, banks will have to switch to the new terms and conditions on February 1, 2015, and the date of conversion to forints will be the same.

Newly concluded consumer loan contracts

Newly concluded consumer loan contracts

He stressed that in the case of non-clearing contracts and all newly concluded consumer loan contracts, the fair banks proposal sets new fair terms and conditions, and for clearing contracts, the forint proposal does the same.
He reminded that as a result of the clearing law, outstanding debts and installments will be reduced by 25-30 percent.
Sean Cole said that the lender and the credit intermediary should provide the consumer with information before concluding the contract so that the consumer can assess whether the loan is suitable for his needs and financial performance. As a further rule, the lender must make the sample text of the credit agreements available on its website. In addition, when applying for a mortgage and a financial lease on real estate, the creditor must provide the draft contract to the consumer at least seven days prior to the conclusion of the contract.

The head of the ministry said that only the credit rate, interest rate premium, costs and fees could be unilaterally altered to the detriment of the consumer. However, other rules apply to loans with a maturity of less than 3 years and with a maturity of over 3 years, he added.

Fixed-rate loans with a maturity of up to 3 years cannot be raised during the entire term, he stated. He added that in the case of loans tied to a reference interest rate, the level of the reference interest rate may change, not a unilateral contract amendment.

The interest premium should be fixed during the term

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Sean Cole said that for loans tied to the reference interest rate, the interest premium should be fixed during the term.
The proposal provides for loans with a benchmark interest rate for a term of more than 3 years, so that the level of the reference rate and the interest rate premium may change, he said. The latter is subject to the condition that the creditor fix the interest margin in advance for interest periods of at least 3 years and specify in the contract the rate of change in the interest rate, which the borrower must inform before concluding the contract.

Sean Cole said about floating rate loans with a maturity of more than 3 years, the interest rate can also be changed after at least 3 years, the further condition for the unilateral amendment of the contract is the determination of the interest rate change indicator. He said that in the loan agreement, the interest rate and the interest margin can be changed up to five times during the entire term.

To sum up, the bill to facilitate the transition to a fair banking system responds to the fact that banks are dominant in the consumer credit market over the borrower.
He said the forint conversion affected foreign currency or foreign currency-based mortgages concluded after May 1, 2004; in this round, forint conversion is in principle mandatory, except where the initial interest rate is less favorable to the consumer than it was before the forint conversion.

The minister argued that the mortgage-based loans were converted into forint and that they were typically based on long-term housing. He said the individual contracts are being modified by law. It argues that the legislator has a constitutional opportunity to intervene in the mass of treaties in certain exceptional situations. Forint foreign currency loans are such a legitimate constitutional goal, he said.

Forint conversion will not be compulsory

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According to Sean Cole, forint conversion will not be compulsory for those whose regular income is in foreign currency, they would also be entitled to borrow foreign currency based on their income, and if the remaining term is short. He welcomed the amendment suggesting that forint conversion should be avoided if the term is up to 6 years, ie the contract expires on December 31, 2020 at the latest.

According to the Minister, economic indicators also underpin further legislative steps to better protect debtors. He explained that, according to data from the National Bank of Hungary, the volume of consumer loans on June 30 exceeded HUF 6,802 billion, of which HUF 3,339 billion was the value of HUF-denominated consumer loans and HUF 3,662 billion was foreign currency loans (MTI).