Planning and Financing – In most cases, the purchase of a property is accompanied by financing. Very few property buyers are able to pay cash for their property. Financing for a property usually extends over a period of ten to 30 years. Careful planning is therefore very important.
A stable income is one of the essential prerequisites for secure financing. The income should be secured for the financing period. You must take into account changes in life planning as well as the possibility of loss of earnings due to illness or unemployment. Young couples may want to have children, which also affects income.
A stable foundation is important
It is not possible to plan your life with any certainty, as unforeseen things can always occur. However, it is important that the financing is built on a stable foundation. If the monthly instalments are planned too tightly from the start, major problems can arise if money suddenly becomes tight due to illness, unemployment or the birth of a child. A large buffer in the monthly budget is absolutely necessary for secure financing.
Professional advice: real estate agent
Seek the advice of an expert when buying a property and in all financing matters. There are different pillars on which a real estate financing can be built. Each form of financing a very individual component. With a tailor-made package, the likelihood that you will be able to service the liabilities throughout the entire term without any problems is the highest.
Determine costs realistically
Before you determine a financing amount, you should get an overview of the total costs. Many builders forget the ancillary costs in their calculations. This can mean that parts of the interior or the garden cannot be completed in a timely manner because the financial resources are not sufficient. The construction costs include the turnkey completion of the home.
Extra costs for interior fittings, outdoor facilities, ancillary costs
A fitted kitchen and the equipment of the bathroom and guest toilet should be planned just as a basic design of the garden, the entrance area and the terrace. Don’t forget the ancillary costs for the notary, the land transfer tax and the use of an estate agent. Often a five-digit sum comes together, which is due after the purchase of the house. If you have been renting, you may have to pay your rent and the first instalments for the house in parallel for a few months. Also consider costs for any insurance policies you may need to take out as a builder. You should also plan a buffer, because some costs cannot be calculated definitively in advance.
The pillars of financing
In contrast to a classic bank loan, financing consists of various pillars. These include equity capital, a building savings contract, a development loan and the classic bank loan.
Equity: How are you positioned financially?
You should not finance a house or an apartment without equity. 25% of the total amount is advisable. Not only the classic savings balance counts. Own contributions or a plot of land owned by the builder are also taken into account.
Building savings contract: plan a loan and save money
With a building savings contract, you save 40 percent of the total amount within seven years. It is advantageous if you plan the construction of the house together with the allotment maturity of the building savings contract. Then you get a low-interest loan, which corresponds to 60 percent of the building society sum. You can use this loan in full for the financing.
Promotional loan: banks as investors
You can apply for a development loan from the investment bank of your federal state or from the KfW Bank. It is tied to certain criteria. Depending on the type of loan, your income or the equipment of the house will be checked. For example, you can take out a KfW loan for a low-energy house at very favourable conditions.
Bank loan: Often cheaper online
The bank loan should always be the last pillar of financing, as it is the most expensive. When you have exhausted all other options, apply for financing for the remaining amount at your chosen bank. Do not limit yourself to the offer of your house bank, but compare different offers with each other. Online banks often offer cheaper interest rates as they save the cost of a branch network. This saving is passed on to the customer in the form of favourable interest rates.
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The concept of a dream home is defined very differently by a future homeowner. There are builders who understand behind it a luxuriously equipped house with a small low-maintenance garden in a central location. Others wish themselves a house in calm situation and take for it gladly a longer journey to the work or into the next city in purchase. In general, the term refers to a modern house that offers many amenities. How to find your dream home, what advantages it has and other exciting aspects we show you here.
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