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Exploring my options: advanced questions

What happens after my mortgage request gets approved?

Once your mortgage contract is approved, it will be sent to your physical home address. This can typically take one to two working days. Depending on the lender you may receive up to two copies of four different documents including:

  • The loan contract ("Darlehensvertrag"): The loan contract stipulating the terms such as the fixed interest period, the repayment requirements, and the loan amount.

  • Acknowledgement of receipt ("Empfangsbestätigung"): A formal acceptance of the documentation.

  • Declaration of Purpose ("Zweckerklärung"): A credit agreement on the purpose of collateral tying the loan to the property.

  • SEPA mandate: Permission to deduct the monthly mortgage payments from your bank account.

Additionally, you will receive the so-called "Grundschuldbestellung" or land-charge, which needs to be sent to the notary. At the notary, you will sign both the purchase contract and the land charge. A land charge order is always necessary if you finance your property as a home buyer. For the bank that gives you the loan, the mortgage serves as collateral. The mortgage is entered in the land register of the corresponding municipality, and this process is referred to as "land charge order". It gives the lender certain rights to the property, which they can assert in the event of the buyer's insolvency. For the final payout, the lender will require the updated land register displaying the appropriate land charge.

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