As a homeowner, you know that home ownership isn’t just about benefits. Rather, owning a home also means responsibility. Towards the people who live in it and the property. This responsibility begins with maintenance and does not end with the payment of the costs.
So there are always renovation and restoration work that can cost several hundred or even a thousand USD. A good example of this is renovating the heating. If you have to replace the heating in the house or apartment, you can not only look forward to a lot of work, but also to high costs. Fortunately, there are some grant programs that support the measure. A loan for a new heater can also be taken out.
Which way is worthwhile?
The renovation or modernization of a heater is complex and expensive. There is probably no doubt about that. Despite all this, many property owners are always amazed at the cost factor that arises and do not even know how to pay these costs.
Therefore, the desire for a loan for the new heating quickly arises. In principle, this is also quite possible. However, every homeowner should inquire about appropriate support measures before taking out a loan. Because these reduce the loan amount and enable inexpensive repairs to the heating system.
It is important, however, that funding is applied for first and then the loan for a new heating system. We have summarized how this works in the following.
What can the bank do?
The bank in turn provides a modernization loan or a classic installment loan. In the case of a modernization loan, the bank will be registered as security in the land register. This has advantages but also disadvantages. This is advantageous if, as a borrower, you have no other collateral to offer and therefore the bank cannot refuse entry in the land register.
It is a disadvantage if you are not the sole owner of the property. In the event of default, the bank has the right to auction the property to get its money. This can lead not only to financial chaos, but directly to ruin.
We therefore recommend that you only take out a modernization loan if you have sufficient collateral. Otherwise, an installment loan should be used that is not tied to a specific purpose and therefore does not indicate to the bank that the heating in their own property should be renewed. This brings security to the loan and eases the repayment.
What is the grant good for?
But before the installment loan or modernization loan is taken out as a loan for the new heating system, government grants should be looked at. These are always granted if the new heating can achieve a better energy value for the property. So if the modernization ensures that the property uses less energy.
In order to be able to apply for these grants, a cost estimate from an executing craft company must be available. Wage and material costs must be shown separately. The invoice, which must be paid at the end, must be able to be paid by bank transfer. This is how undeclared work is to be avoided.
Is a loan from abroad worthwhile?
If you have problems with private credit checker, it is generally difficult to get a loan in Germany. The idea of taking out the loan for the new heating system abroad is therefore quickly understood. Unfortunately, it’s not as simple as this may sound.
On the one hand, because a loan from abroad is only provided as a small loan up to 5,000 USD. A sum that is sometimes not sufficient to renovate or replace the entire heating system.
On the other hand, it can happen that a loan from abroad cannot be combined with the funding. We therefore recommend that you take out a loan in Germany that is secured with a guarantor or a second co-applicant rather than go abroad for the loan for the new heating system.