The dream of owning a home is cherished by many of us. Unless, because our parents have already done it and we can look back on a carefree childhood, great in the large garden, climbing trees and with many a pet and want to offer that just as our children or because we just for wish our future family. The reasons why we want to build a house are very different. But if you have a big desire for your own four walls in the form of home ownership, the implementation can often not be fast enough. The own house offers not only more space and free space, but also financial independence as well as a secure provision in old age. But before the groundbreaking ceremony, there are many things that need to be considered and clarified - especially the question of financing. We'll show you which ways and means there are.
1. What can I afford?
Or in other words, how much house can I afford? Because that's exactly the question that we all have to ask first, who have the dream of the house. After all, it's about being able to finance the home without risk. As a rule, we will not be able to settle all the costs of buying a house at once. That's why you need a loan that has to be repaid for years. The cost of buying a home should not be underestimated, because whoever buys a property pays more than just the price of the property. In addition, there are additional costs due to the borrowing and the purchase contract. But that should not be everything. Likewise, there are notary fees, a fee for entry in the land register, costs for the land transfer tax and possibly a commission for the broker. How much the additional costs actually are depends on the purchase price and some other factors that have to be calculated on a case-by-case basis. In principle, however, it can be said that home buyers have to reckon with about five to twelve percent additional costs, which should not be underestimated, considering the sheer amount of the house.
You can find out about the advantages and costs of passive houses here!
The first step in the financing of households begins with the specially saved assets, which is an important building block for your own home. Whole 20 to 30 percent of the costs of building a house should be covered by the equity capital, so advise mortgage lending experts and consumer advocates. Everyone can calculate for themselves, which sum would be approximately in his very personal dream home. For whom that seems almost unattainable, but for the burst but not the dream of the house. In the meantime, there are also financing concepts without equity - so-called full financing. Nonetheless, the advantages of house financing with equity are obvious: equity is the anchor of any real estate financing. The more you can use your own financial resources as a buyer or builder in the desired property, the lower the credit and monthly burden. In other words, the less equity is contributed, the higher the risk for the banks and thus the interest rate.
3. Building savings contract
With a Bauspar contract one sets from the beginning on its equity. So at some point to dispose of the necessary financial resources for their own house construction, a home savings contract is often set up as an investment at a young age. The saved capital can then be used later for mortgage lending. For this purpose, a certain monthly amount is paid and interest. Once the savings have been reached, the contract is ready for assignment. That means, you get the loan from the building society to finance your dream home.
The good thing about a Bauspar contract is that the rates are consistent and should go something wrong with the financing, the building society is registered as a subordinate debtor in the land register. However, one should compare the different tariffs and scrutinize closely. And if you decide on a home savings contract, so you have to set many years in advance, when to start building the house.
A loan is, simply put, a sum of money that a bank lends to you for a certain period of time. If you decide on a loan, you are obliged to repay the borrowed amount plus the interest due. After all, the bank does not just lend money like that. The interest can be fixed long term, which has the advantage that the monthly burden remains firmly calculable. In general, however, the longer the fixed interest rate, the higher the interest rate.
A loan is often equated with a loan, which is true in principle, but they differ. In fact, while a loan is associated with a lower sum and maturity, higher yielding and longer maturity bonds are called loans. Mortgage lending, which usually lasts for several years, if not decades, is therefore a loan. Tip: If you have a mortgage loan, get a long-term financing plan from your bank. This will give you a good overview of the costs that are due in the years.
5. Hire purchase
A hire purchase is another way to buy a property. In this case, a property is rented with the aim to buy the object at a later date at a fixed price. The rent, which has been paid until then, is then credited to the amount to be paid. A hire purchase always runs between the buyer and the landlord, whereby a bank as an intermediate instance is usually not involved. For this one concludes a hire purchase contract, which consists of a lease and a contract for the subsequent acquisition of the property. If you are self-employed or, as the bank would say, working in a "crisis industry" such as hospitality, leasing can be a good alternative, as banks are reluctant to lend. Another advantage is that the monthly rate remains constant over the entire term and is independent of interest rate developments. A disadvantage, however, is that mostly bad objects are sold, that is, properties that are poor or bad to sell. If one considers the Mietkaufmodell into consideration, it must be kept in the real estate selection a keen eye on this.
As far as the possibilities of promotion are concerned, the clients should inform themselves in good time and preferably before building a house or buying a house. This means that even when looking for a suitable plot of land and planning your dream home you should be informed about all possibilities of funding and familiarize yourself with the conditions, because only then can subsidies also relieve the budget. There are very different offers that support the construction of houses with benefits, subsidies or loans. There are subsidies from the federal states, cities and communities as well as from the church, whereby the focus is on the two young families mentioned last.
7. reverse mortgage
Reverse mortgage - ever heard of it? If not under reverse mortgage, so maybe under the name of real estate or pension. There are many names for this product. But the idea behind it is the same: either real estate owners sell their property or they libel it. However, this model is aimed at consumers of retirement age, with different models of financing. Thus, the owner receives a one-time payment, temporary or lifelong pension. Only after moving out to an old people's home or even after death does the property become the property of the buyer. The advantage of this is that, as an owner, you can live in your own home for the rest of your life and still receive money for your property. On the other hand, and that is the downside, the reverse mortgage is a fairly expensive product considering only the interest rate on the loan and the reinsurance of the bank against longevity risk. This means nothing else than that the bank secures itself in case you live longer than statistically calculated and make up for the associated losses. So whether a reverse mortgage is worthwhile can not be answered flat-rate with yes or no.
8. Errors in mortgage lending
We are all just people and mistakes happen. However, when it comes to mortgage lending, the consequences can be extremely serious. One has planned or calculated something wrong and the dream of a home can quickly become a nightmare. To avoid that, it is important to scrutinize - to get back to the initial question - how much property I can actually afford. The most important calculation bases are: income, purchase costs for the real estate, incidental expenses plus current financing costs. You should check all these factors exactly. Tip: It is advisable to create a household book. In addition to all deductions should still be a clear plus at the end. After all, a property must be financed over the long term. In addition, often come unpredictable things such as repairs to the house, maintenance costs for the car and so on. The monthly financial burdens that are incurred in addition to the actual payment for the house, should not be underestimated. If you have calculated all pending costs carefully, they are reckoned and you also have a good feeling when acquiring the dream property, should your dream of your own house nothing stand in the way!