The Credit on Real Estate - Local Value and Relevance for the Construction Financing in Germany and Denmark

Research Paper (undergraduate) , 2004 , 93 Pages , Grade: 1,3

Business economics - Investment and Finance

Having a look at the popular definitions dealing with the topic real-estate credit, one is confronted with a wide variety of different explanations. One obstacle while searching for a suitable definition of the German termRealkredit(real-estate credit) is the fact that this term is in Germany rather known under the nameHypothekendarlehen(mortgage loan). Though one also finds the word ‘Realkredit’ in the relevant literature as well as in numerous other sources of definitions, it is not known in the vernacular.
In Denmark the situation is completely different. Here, the termrealkreditbelongs to the mortgaging as the house to the property. Moreover, it is also known in the general language use including compound nouns such asrealkreditlån(real-estate loan) orrealkreditlov(real-estate credit act).
Whether one is more cotton on to the term ‘real-estate credit’ or ‘mortgage loan’ or even ‘hypothecary credit’ (in German:Hypothekarkredit)is entirely up to the reader, although we later see that there is a difference between these terms. For the sake of a better comprehension, the words ‘real-estate credit’, ‘credit on real estate’ and sometimes also ‘real-estate loan’ will be used in the further discussion with a few exceptions regarding extracts and quotations. As far as the explicit definition of the real-state credit is concerned, authors in both countries agree upon a more or less identical explanation. In Germany’s major reference book, the Brockhaus-encyclopaedia (1996, vol. 18, p. 109), one speaks about a“credit that is granted for the security of tangible assets (real estate)”.A slightly extended definition can be found on the internet platform of the Duden. Here, one describes the term as a“loan at which the debtor guarantees the repayment with real estate or other assets”.

Inhaltsverzeichnis (Table of Contents)

• Placement of the Credit on Real Estate
• General Disambiguation
• The Term 'Realkredit' in Germany
• The Term 'Realkredit' in Denmark
• The Granting of Real-estate Loans
• Real-estate Credit Institutions in Germany
• Realkreditinstitut or Hypothekenbank ?
• The Importance of Real-estate Credit Institutions as Specialised Commercial Banks ...
• Private Mortgage Banks
• The Legal Restrictions of Mortgage Banks
• The 21 Members of the Association of German Mortgage Bank
• Historical Development
• The German Pfandbrief.
• The German Mortgage Bank Act (HBG)
• Pfandbrief-Rating of the German Mortgage Banks
• Real-estate Credit Institutions in Denmark
• The Real-estate Credit of the Danish 'realkreditinstitutter'
• The 8 Danish Mortgage Banks
• Historical Development
• The Danish Mortgage Credit Act
• The Rating of Danish Mortgage Bonds
• Importance of the German and Danish Credit on Real Estate and its Advantages over other Forms of Financing
• Alternatives in the Field of Construction Financing in Germany
• The Mortgage Loan as the Non plus ultra in Construction Financing?
• Loans from Building Societies
• Endowment Mortgage
• Two-way Financing via Investment Funds
• Summary.
• Alternatives in the Field of Construction Financing in Denmark
• The Unrivalled Mortgage Credit?
• Loans from Danish Saving Banks
• Additional Loaners
• Summary of the Importance of the German and Danish Real-estate Credit
• The Real-estate Credit in Practice.
• General Considerations as to the German and Danish Construction Financing
• Business Environment
• Reasons for the Different Proportion of Proprietary
• Real-estate Credit Financing in Germany
• The Annuity Loan in Practice
• Real-estate Credit Financing in Denmark
• Danish Loan Types in Practice
• The Future of the Real-estate Credit as an important Instrument in the Field of Construction Financing
• The Future of the Real-estate Credit in Germany
• Standardisation as to the Granting of Real-estate Loans
• The German Pfandbrief as an Export Hit
• New Ways of Real-estate Financing - Vision or Reality?
• The Future of the Real-estate Credit in Denmark
• Standardisation – No foreign Word in Denmark
• The Saturated Danish Market
• The Danish Credit on Real Estate becomes international
• Summary

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This paper aims to explore the significance of real-estate credit in the construction financing market of Germany and Denmark. The author analyzes the differences in the granting of real-estate loans and their implications for the national importance of this financing instrument.

• The role of real-estate credit in construction financing in Germany and Denmark
• The historical development of real-estate credit institutions in both countries
• The legal frameworks and regulations surrounding real-estate credit in Germany and Denmark
• The importance of real-estate credit institutions in the overall financial market
• The future trends and challenges facing real-estate credit in both countries

Zusammenfassung der Kapitel (Chapter Summaries)

• Placement of the Credit on Real Estate: This chapter introduces the concept of real-estate credit and clarifies the term 'Realkredit' in both Germany and Denmark.
• The Granting of Real-estate Loans: This chapter focuses on the real-estate credit institutions in Germany and Denmark, including their historical development, legal framework, and significance within the financial market.
• Importance of the German and Danish Credit on Real Estate and its Advantages over other Forms of Financing: This chapter discusses the advantages of real-estate credit over other forms of construction financing in both countries, analyzing the alternatives and their respective strengths and weaknesses.
• The Real-estate Credit in Practice.: This chapter examines the practical aspects of real-estate credit financing in Germany and Denmark, including the different loan types and their application in real-world scenarios.
• The Future of the Real-estate Credit as an important Instrument in the Field of Construction Financing: This chapter explores the future trends and challenges facing real-estate credit in both countries, analyzing the potential for standardization, internationalization, and new financing models.

Schlüsselwörter (Keywords)

This paper focuses on real-estate credit, construction financing, mortgage loans, real-estate credit institutions, Pfandbrief, Realkredit, Germany, Denmark, banking regulations, historical development, financial market, future trends.

• College: Stralsund University of Applied Sciences
• Grade: 1,3
• Author: Stephan Dannehl (Author)
• Publication Year: 2004
• Pages: 93
• Catalog Number: V48254
• ISBN (eBook): 9783638450126
• Language: English
• Tags: Credit, Real, Estate, Local, Value, Relevance, Construction, Financing, Germany, Denmark