The biggest financing mistakes when buying a home in Germany
The preparations that future homeowners need to put into buying negotiations and information gathering are based primarily on the type of real estate purchase. Old buildings are particularly eye-catching, since buyers rarely have the necessary expertise to adequately estimate any costs for renovation and restoration works . Surely also a reason why financing fail due to lack of advice and expertise, without the inevitable financial reasons are crucial. Why is recurrent mistakes in the often biggest financial burden that people voluntarily face in life, is the subject of this article.
We go to the seven biggest mistakes in financing, and give Following this, advice on how to at least avoid this part in your own construction or purchase project. Therefore, consider this listing as a kind of checklist that you should work through and use with the help of expert third-party help.
Approaches to Prevent Costly Errors
1. Know Your Own Financial Framework
What is normal practice for self-employed people is initially annoying to many homebuyer buyers. A plan that contains all the regular and irregular, even unintentional costs, is your foundation here. Your financial leeway consists of your guaranteed net household income as well as any insurance coverage and the like. Proceed conservatively, calculate the actual earnings based on the average incomes of recent years, and also add occasionally incurred costs to your list. In addition, you can quantify the costs of necessary purchases, typical repairs, vacations and similar. Only if you estimate your consumption correctly, with the help of a household book, for example, do you know the actual scope.
2. Realistically estimating construction costs
The financing to be funded will not do you much good if the necessary costs go beyond the planned scope. It will be tricky if you already make payments from the funds of your loan during the construction period, which have a negative effect on the remaining loan amount due to the interest rate. The keyword & quot; post-financing & ldquo; Banks are reluctant to listen, as it makes it clear that you have saved money in the wrong places. Construction and renovation costs must therefore always be enumerated and appreciated by an independent expert in accordance with the applicable guidelines, and included in the planning by you. In addition to the official equity capital, create separate reserves - in case of doubt you can make special repayments so that your loan will not be extended in the time frame.
3. Pay attention to own services
Banks handle, absolutely right, planned in-house construction services such as equity. A temptation that many people can not resist, without being aware of the consequences of major deviations in the least. For example, a talented craftsman or an education is needed in order to be active within the framework of this. Plan at least twice as long as skilled craftsmen usually do it. For example, 40 hours of work would often mean 80-100 hours for you, and even 2 hours of work in the evening would take at least a month. An additional burden, as rent and deployment rates are increasingly on your budget. In addition, there is a risk that work can not be completed despite planning otherwise, resulting in additional costs. Not infrequently, this constellation of shaky financings finally tore the prop under the ground.
4. Do not trust a consultant blind
For many, it is convenient and pleasant at the same time to run a financing through the long-standing house bank. Do you know the adviser in the store, and yet in the past you were always treated correctly and courteously - a knitting trap that can be very expensive with such large loans. Despite the good starting position, that the bank has all the key framework data of economic potency and a license is therefore purely a matter of form, it is advisable to risk the comparison. A difference in interest of 0.1 percentage points means at 250,000 euros and 2 percent repayment in the first 10 years about 2,000 euros difference in interest . If you count it up for the entire duration, you will see which points seem to be marginally suddenly having a very real impact on your wallet.
5. Initial repayment selected too low
Banks that wish to offer you financing usually do so with an assumed initial repayment of one percent. With a loan of 100,000 euros, and an interest rate of 3.5 percent, this means a monthly rate of 375 euros. The problem here is the running time, which is almost 43 years. Obviously, with a longer term automatically higher interest payments, you finally pay only one percent. In the example mentioned, a total of more than 93,000 euros will be due solely to interest. (sic!) So choose a repayment of at least three percent, and increase your rate to 541 euros - the benefits are a halving the maturity , and a Zinserspanis of nearly 50,000 euros. Money, which is often needed again after the payment of the property to renew equipment and pipes or pipes, and so bring up to date.
6. Fixing interest rates too short
Especially the currently favorable interest rates which banks offer for home equity financing are tempting. After all, sample loans are advertised with rates that usually only mean the worst for the customer. To do this, go back to point number 5, and illustrate the importance of flawed and reckless planning. The lower the interest rate, the longer it should be. Therefore, plan at the age of 20, because a range of three to four percent will hardly be beaten in the future, and there is room for a higher eradication. Benefit therefore from the advantage that even with such a commitment, loans can be dissolved after ten years with a notice period of 6 months. In case of doubt, you can still take on follow-on financing if interest rates develop differently, contrary to expectations.
7. Client protection as protection against financial burdens
Finally, the security during the construction and the term of the financing is neglected, since all forces are bundled and fixed on just that financing. A mistake that can quickly lead to your doom. In addition to the ideally co-earning spouse, it is important to adequately secure the main earner. A solid basis is provided by a package of disability insurance (with an investment policy) as well as a term life insurance, which is extremely useful if the domestic basis threatens to break away in the event of death, without a second income and other benefits. These building blocks are, contrary to different opinions, often inexpensive and more and more flexible. The BU, in particular, is indispensable because it pays regardless of government benefits and can be determined and settled on the basis of income.
It becomes clear how much risks are underestimated . It is therefore advisable to work with the partner to consider how to secure the financing or unplanned costs. Make it clear again and again that Property Commitment - this refers primarily to the protection and receipt of property , and to the expenses necessary for this, which are not shared in solidarity with a community of owners .
A Plan B , which provides for sale in an emergency, works only for absolute top assets and solid financing that has less than 50% of the acquisition cost. The immobility of a house shows very clearly how important accurate planning is. Therefore, invest your money in advance and let independent professionals work.
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