How does one actually buy a share?

The first decision is:

• What do I want to invest in? Stock or ETF
• Where do I want to invest through? House bank, direct bank or app?

Passive (ETF) or active investor (stock)?

Rather than passive investor in an ETF portfolio (stands for English: “Exchange Traded Fund” and is an exchange-traded index fund that tracks the performance of an index, such as the DAX. In essence, ETFs combine the advantages of stocks and funds in one product, so you can invest money directly in entire markets through ETFs. A real advantage. Or do you want to be a more active investor, in individual stocks. Now it’s a matter of analyzing individual companies to determine which paper you want to buy. In the next step, you need to contact your bank to buy a paper.

House bank or direct bank – what is the difference?

With the bank you have two options, either you go through the classic house bank, such as Volksbank and Sparkasse. Here you can have the purchase processed directly through the banker or online. An alternative is the direct bank as well as comdirekt or degiro, which are usually much cheaper than in a classic branch bank.

The difference between a classic branch bank and a direct bank is that you get in the branch bank, with a contact person, advice. This direct contact person you do not have in the direct bank.

Which banks have the most branches?

1. Deutsche Bank AG (2,984 branches)
2. Commerzbank AG (1,530 branches)
3. Postbank AG (1,092 branches)
4. Unicredit Bank AG (933 branches)
5. Wüstenrot Bausparkasse AG (500 branches)
6. Targobank AG (351 branches)
7. Santander Consumer Bank AG (324 branches)

Source: Banking Association (figures, data, facts of the banking industry).

Trading place, price and KDV (price-earnings ratio)

Buying shares online is easy. After logging in, for example at a direct bank like comdirekt, stock values can be found directly via main menu. The search gives directly a result. Here one can select now, on which stock exchange one wants to buy the share. For example, you could select “Xetra” and conclude the transaction via the Frankfurt Stock Exchange.

If you take the Lufthansa share as an example for today, the daily price is 26.915 Eur (+1.64%). But here you can also see the KDV, the price-earnings ratio, currently at 6.3306. The dividend yield based on this price of 2.6

Price: 26.915 euros
Change: +1.64%
KDVe: 6.3306
DIVe: 2.60%

Development and performance on long term

Further down in the search results one then finds charts, mostly of the last 3, 6 and 12 months. In addition to the overview, one also has financial ratios. Here one finds the performance of the share in the last months and years. So you can see the development of the share at a glance. You can also find comparative figures.

The purchase can be completed online simply by clicking on the “Buy” and “Sell” buttons. In the so-called “domestic order” one can then determine the amount of shares to be bought or sold.

Check transaction fees and price-performance list

Tip. Transaction fees are incurred for every purchase. At comdirekt, it is exemplary currently around the 9 euros + 0.25% of the purchase. However, this information can change. E is therefore important to regularly check the price performance list of the bank to know how expensive the share purchase will be.

Again, you can now see all the trading venues through which the paper can be purchased. For example, the stock exchange “Xetra” would be closed on the weekend. During the week, one should therefore trade around 4 p.m., because here is the most volume in the market and so it is certain that one can also buy the share. Between the stock exchanges, of course, there are differences, we will discuss them later in another article.

Limit execution

In the order details, a few more additional information can be entered. Important would be here, the execution you want to limit. That is, they want to pay only a certain price for a share, no more.

If the price of the exemplary share is trading at 26.915 euros, we can say that we will buy the share at a maximum of 27.30 euros. The strict limits are important to be sure to buy at the best possible price. Otherwise the order will be executed in any case and it can be very expensive.

Trading validity determines the length of time. If it is 1 day, the purchase is targeted only for 24 hours. If it can not be executed, at the desired price, the order simply expires.

Summary of the trading order

1. Trading type: buy
2. Designation: exemplary share AG vink.Namens-Aktien o.N.
3. Securities: DE123456789 / 123456
4. Piece: 1
5. Exchange: Telegate
6. Execution: Limit: 27.30 Euro
7. Validity: daily
8. Provisional amount to be made out: 27.30 euros before tax

The last thing to do is to enter the tan. This will be sent to you by the bank. Now the domestic order is placed. Must be paid in successful trading the purchase price plus trading fee of the bank.

The placed purchases can then be seen at all regular banks in the main menu. The purchase can then take a few minutes to a few hours.

Order document after the purchase

After that, the stock is in the depot and a maximum of 1, 2 days later comes the order document.

Trading: Stocks, currencies and apps

If you want to read more tips, in the blog you can find many more articles, like:

• Learn Currency Trading -Experience, Tax & Example
• Cryptocurrency & Block Chain – Simply Explained
• Stocks, ETF, Forex, Cryptocurrency, Social: My Experience and Mistakes!

Tailor-Made Real Estate Loans Save you Interest Costs

The real estate interest rates are currently at an astonishingly favorable level. Nevertheless, a real estate loan can become a few thousand euros more expensive if planned incorrectly, as it is a high investment sum with a long term.

How do you finance at the most favorable rate?

You can recognize a good real estate loan by the fact that it is tailored to your needs in terms of flexibility and interest rate.

Frequently asked questions are:

• What are the requirements for a real estate loan?
• How much real estate credit can I afford?
• Which bank is the best for a loan?
• How much equity should I have when buying a house?

Optimal offer needs comparison

An optimal offer requires comparisons in which you compare interest rates and overall conditions using various repayment examples. You can influence the real estate loan interest rates in various ways.

First and foremost, your personal interest rate is based on a positive credit rating and the invested equity capital. You benefit from an interest rate reduction by increasing the repayment installments per month and shortening the term. Through a wide search and the resulting comparison possibilities you can finance much cheaper than if you concentrate exclusively on one bank and choose the first offer for a real estate loan binding.

Real estate credit guidelines

In 2016, the real estate credit guidelines were tightened, which means that financing refusals are now more frequent than before the tightening. You can also avoid this point on the free financial market, because an independent real estate credit broker cooperates with numerous banks and will always find a suitable and low-interest financing option for you.

Due to the immense loan amount, even the smallest differences in interest rates are a reason for comparison. They recognize fast that the saving in comparison of the most favorable and most expensive real estate financing can amount to a five-digit sum and be thus considerable.

What Influences the Conditions of a Real Estate Loan ?

Apart from external factors such as the economy, which has a significant influence on the mortgage interest rate, your personal circumstances influence the mortgage loan. With the best credit rating and a high equity investment, you finance at the best price. Secure advantageous conditions and compare not only the borrowing rate and effective interest rate, but also the contractual conditions of several real estate loans.

Credit request and influence on creditworthiness

Since a targeted credit inquiry influences your creditworthiness and is visible to third parties, we advise you to ask for conditions as a basis for comparison.

Tip! Condition requests as a basis for comparison

We would be happy to take on your order and ask for conditions from various financing partners for your property. In order to receive a specific offer and to provide you with the appropriate conditions, we will base it on the exposé of your desired property. In our portfolio you will find attractive properties that you can easily finance with a real estate loan, which you can also apply for through experts.

In order to provide you with an offer of conditions and to show you comparison options, you need the important information about your financial background, your creditworthiness and the property as well as the monthly repayment rate you are aiming for.

Creditworthiness is the best proof of creditworthiness with a banker:

Compare Offers: Advantages of the Free Financial Market

What criteria should you use to compare real estate loans? First and foremost, the borrowing rate and the effective interest rate play an important role.

Terms and special repayment options

A real estate loan is favourable if it fully matches your repayment expectations and allows you flexibility within the term. Even if real estate loans with an unscheduled repayment option have higher interest rates, this focus can be worthwhile and ensure that you repay the financing in a shorter term and do not have to pay additional fees for unscheduled repayments.

Due to the variety of real estate loans on the free financial market, we can find an offer for each of our customers that fits their personal requirements without compromise and offers the most favorable overall conditions.

Changes in the repayment amount

In comparison you should use the possibility to recognize the variance by changes in the redemption amount. Even a small increase in monthly repayments with the accompanying shortening of the term can reduce your interest rate by a large amount and make the real estate loan noticeably cheaper.

There is no real estate loan that is equally suitable for all borrowers. Depending on your equity, the desired term and your credit rating, the conditions vary. You should also bear in mind that each financing partner pays a different interest rate and includes various factors in the contractual agreements.

Real Estate Loan: Possibilities & Alternatives

Would you like to fulfill your dream of your own home, a condominium, a building plot or a commercial property? Then the right choice of real estate loan will determine how high the interest burden and thus the total cost of your real estate loan will be. Already when choosing a real estate loan, you as a potential buyer are faced with many questions and considerations, for example, whether you should choose a classic annuity financing or opt for another form of financing.

Follow-up financing is also possible in various ways. Ultimately, you are faced with the question of whether you are better advised with a long and fixed debit interest period or with a flexible real estate loan.

• Real Estate Financing

Creditworthiness: Who checks what here?

In modern business dealings, it is impossible to imagine business without the examination of creditworthiness – i.e. credit rating. The reliability in payment matters is already checked with each purchase with a credit card. Installment purchases in the electrical goods market, for example, only work for the customer if the creditworthiness is checked immediately. The classic institution for credit information of any kind is the Schufa. Since 1927, this credit agency, which is organized privately as a public limited company, has been early to assess the reliability of people in terms of their ability and dependability to pay.

Before someone else checks my own creditworthiness, I can always do it myself. Here too, the classic way is to enquire at the Schufa. The first (usually postal) inquiry with Schufa is free of charge. For each further one the Schufa charges a fee of 30,- €. The answer is then also sent by post. For both landlords and tenants, Schufa offers special service packages with which credit information is formally correct.

Of course, there are now also numerous ways to determine your creditworthiness online. The advantage: it is faster and I can look at my own data at any time. If an error is noted there, it can be corrected very quickly. No matter whether Schufa or one of the online providers: Without the use of an ID card, no one can access their credit ratings.

Credits: Current and long-term liabilities

In the first step, for example, information on current or terminated loans, credit cards or credit periods is recorded in the credit check.

Accounts: Bank, shares Depot & Co.

Furthermore, the auditors obtain information from the buyer about his own bank or current accounts, as well as overdraft facilities, mail order accounts or account terminations.

Contracts: Telephone, leasing, payment by installments.

Here, for example, information on the conclusion of contracts, contract cancellations and individual contracts is collected.

Debt: Debtor directories (like Schufa)

This step checks whether entries have already been made in debtor directories. However, such companies also store information on dunning notices, insolvency applications, foreclosures and also on affidavits.

Check Schufa and evaluate data correctly

By obtaining information from a credit investigation agency (Schufa) you create a foundation. But before you decide on a tenant, you should evaluate the data correctly, for which you need a lot of expertise and experience in “reading” the score values. If you make the wrong decision on this point, this circumstance can lead to high follow-up costs and much trouble.

In real estate transactions – and also in the case of letting – the commissioning of a real estate agent naturally also includes checking the creditworthiness of interested parties. This gives you the security to rent to a really solvent applicant. You yourself have no work with the inquiry at the Schufa, since this service belongs to the achievements of the assigned real estate agent.

Likewise, you can be sure that you will only receive recommendations for those applicants who are eligible based on their income and creditworthiness. The evaluation of creditworthiness is carried out according to your criteria as owner. Do you have a very specific idea of the income, or rather the income level of your new tenant? If so, this important basis for you will be taken into account in the search for tenants and included in the screening of potential applicants. The pre-selection sent to you will save you a lot of time and nerves. Your gain is a maximum of security that you have found the right tenant for your property.

Letting with brokers? All advantages at a glance

Whoever thinks of renting out as a real estate owner does not always have an estate agent in mind at first. After all, the use of an estate agent costs money: Since June 1, 2015, the buyer principle has been in force in Germany for the procurement of living space: If you appoint an estate agent, you pay him. If the landlord appoints a broker to act as an agent, he must also pay him. If the broker finds a prospective tenant, the future tenant does not have to pay the broker anything.

What the broker costs when renting out

The amount of the commission is in principle freely negotiable for landlords. Usually it is between 1.5 and 2 net cold rents plus VAT. For tenants, the amount of commission is clearly limited by law: It may not exceed two net cold rents plus value added tax.

But: A real estate agent…

• Saves time and effort
  A good real estate agent takes over the time-consuming search for tenants on site.
• Offers more security!
  A good real estate agent checks the creditworthiness of potential tenants.
• Top rental agreement!
  A good real estate agent ensures a good tenancy agreement.
• Brings tax advantages!

Brokerage costs are tax deductible for the landlord.