Normally you do not use a consumer loan like a mortgage. A home loan is often financed by a mortgage up to 80% of the value of the property, and with a bank loan for the last 20%. However, this does not always have to be the right solution.
Does the accommodation cost less than 500,000 KR.
If the home you are going to buy costs less than DKK 500,000, then it is highly likely that you can not get a mortgage at all. The mortgage bank simply earns too little on the small loans, and in addition, the percentage of uncertainty is much greater in this size house. If the house ends in the forced sale, it is likely that there are no buyers and that one must either give up selling the house or sell the house at a very low price. Therefore, mortgage banks do not dare to lend money to “cheap” houses. Low earnings and high risk do not sound well in the ears of mortgage banks.
If you are rejected by the mortgage institution, it is likely that you will also be rejected by the bank. If you are not denied by the bank, you are likely to pay a very high interest rate. The bank also sees your “cheap” house as high risk and therefore they are well paid to lend you money.
When is the consumer loan the right way?
If the mortgage bank has rejected you and the bank takes too high-interest rates, it may turn out that a consumer loan is a right way. Consumer loans are otherwise known for high-interest rates. The high-interest rates on consumer loans are quite correct if you compare with a mortgage to just 4%. However, we are up in 2-digit interest rates of maybe 10%, 15% or 20%, so it can be far cheaper with a consumer loan.
Most consumer loans are only available up to DKK 75,000, and this is usually not enough for a home loan. However, there are also several mortgage lenders where you can borrow up to $ 250,000. This makes it possible to combine a mortgage loan with a consumer loan or if you have purchased a cheap house for less than half a million, you can use the consumer loan as the only loan for your home.