Who would like to build or buy a house, should bring along for it ideally own capital funds, thus saved money or a building savings contract. After all, it is an important component of real estate financing. A rule of thumb says that you should only think about buying or building a property when you have about 20-25% of the expected costs as equity capital. Here you can learn more about the different forms of equity as well as real estate financing without equity capital.
Possible variants for equity
The so-called equity capital can be available in different forms. The classic variant is that you have saved money, which is in a savings account. Alternatively, you may have inherited a certain amount of money. In addition to these bank and savings balances, cash is also part of the equity capital. Savings bonds and building society contracts are another way to prove equity capital. The building savings contract is not very popular nowadays, but still there are many people who once got such a contract from their parents or relatives. In the meantime, there is hardly any interest left on the saved credit balance. Craftsmen still benefit, however, because in their case the employer always pays in the same amount that is deposited as well. In any case, the main purpose of the contract is to finance a property. However, you can also liquidate this without a property and have the amount paid out to you.
In addition, land that has already been paid for and construction services that have already been paid for also serve as equity capital. Likewise, you can validate life insurance, shares, mutual funds and securities.