Anyone who wants to buy or finance a property must carefully estimate the costs incurred. Ten tips for a successful financial planning.
The times for builders or homebuyers are good. Because of the euro crisis, the interest rates on construction loans remain record-breaking low. According to the Federal Association of German Banks, customers had to pay about 3 percent in July 2012 for a loan of 100,000 euros with a term of ten years. The dream of a home is within reach. However, future real estate owners need to calculate soberly for sound financing.
1.Define the financial framework
Before buyers or builders even begin to look at the real estate offers or look for suitable land, they should set their own financial framework. The key question: How much money do I get together, how much money do I have to borrow from a bank? The rule is: Without equity, nothing works.
2.Bring sufficient equity
“At least 20 percent equity would be nice,” says Heike Nicodemus of Stiftung Warentest. “But the more equity the better, because that makes the interest rate on the loan cheaper.” Therefore, it could also be advisable to make investments aside from a security reserve. Because banks are more generous if they do not have to lend the property to the last tile.
3.Schedule additional costs
In addition to the price of the property but still other costs must be considered. For example, a land transfer tax applies. Depending on the state, this is between 3.5 and 5.0 percent. Also, the land register entry costs money. 0.5 percent of the purchase sum is due. The notary who accompanies the purchase of real estate must also be paid. He gets between 1 to 1.5 percent. For a property that costs 300,000 euros, the additional costs quickly add up to 21,000 euros.
4.Withhold money reserves
“This is the price for a midsize car that comes together,” says Eva Reinhold-Postina of the Association of Private Builders. She advises, therefore, not too short to calculate. Otherwise unforeseen expenses can quickly shake up the financing. “It is best to be liquid if you have already paid for the property.” About 10 percent of the total volume should be left after the purchase. Heike Nicodemus of Stiftung Warentest recommends at least three net monthly salaries as a reserve.
5.Record favorable credit
Is the budget, you have to take care of a corresponding loan. Heike Nicodemus advises first to turn to a credit intermediary. “They work together with many banks and find suitable offers through appropriate questions.” Then customers should inquire at the small, regional banks. With these offers under the arm, customers should then go to their house bank.
6.Compare the APR
Important for all offers: “Compare the annual percentage rate at various banks,” says Stephan Mietke of the Federal Association of German Banks. In addition to the nominal interest rate, the effective interest rate takes into account, for example, processing fees as well as the interest and principal settlement on the credit account.
7.Adjust the financial burden to the income
How the loan is designed depends on the personal life situation. “The monthly burdens should not exceed 30 to 40 percent of net family income,” advises Eva Reinhold-Postina of the Association of Private Builders. “In this net family income reserves should be deducted for old age.”
8.Do not set the repayment rate too low
The repayment, ie the repayment of the loan, customers should not set too low. “In the current low-interest phase, the repayment rate should be 2 to 3 percent,” says Mietke. “If you repay only 1 percent, you should have special repayment options, otherwise the loan runs too long.” A special repayment is a payment that reduces the loan out of line.
9.Have interest rates fixed
Since interest rates are historically low, they should be fixed as long as possible. Usual is a period of 10 years. “But we should aim for 15 years,” says Heike Nicodemus of Stiftung Warentest. However, a longer fixed interest rate costs a small premium.
10.Use state funding opportunities
Homebuyers should also try to use state funding opportunities. If you build, refurbish or modernize your property in a climate-friendly way, KfW offers low-interest loans and subsidies. That’s worth it, but you should be well informed. “The development loans have strict conditions,” explains Eva Reinhold-Postina.
Who has considered all these points, can realize the dream of your own property. Because one thing is certain: the financing stands on a solid foundation.