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When short-time work endangers the dream home

A.Even in times of Corona, real estate remains in demand – or perhaps because of it. Many Germans long for the security and freedom of their own four walls. But at the same time, some dreams burst as suddenly as a shimmering soap bubble, even if the dream property seems to have finally been found after a long search. Because the corona crisis and its economic consequences often put a heavy strain on personal finances. And they may do it so badly that credit institutions will refuse the mortgage loan for the dream home.

“The current situation is particularly difficult for those who have little or no equity,” says Max Herbst from FMH-Finanzberatung. In view of the Corona crisis, many credit institutions have tightened requirements and worsened conditions, especially for full financing, i.e. borrowing from 90 to 100 percent of the property purchase price, in order to minimize the risks. And the demand for building finance is currently so high that many banks can choose their customers anyway, says Herbst. Some institutes set construction interest rates so high that they seemed very unattractive compared to other financial institutions in order to keep other customers away, such as PSD Bank Kiel.

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