Der Da
2013-07-17 16:01:23
- #1
How do the others do it... a question you often hear. There are two camps. Some save and have the necessary cash, possibly wait. The others get taken advantage of, believe the salesman's claims, try to keep the house for 5 years at all costs with a second job and complete sacrifice. Then nothing is repaired or maintained. So after 5 years, either the relationship is destroyed, or the bank takes what belongs to them. The result is the same... the house is gone, you sit with a nice pile of debt and wonder how it came to this.
This is certainly a bit black and white, but the reality often looks like this.
You chose a cheap house... fancy. But why is it cheap? You chose an independent financial advisor? Are you sure he is independent and not just focused on his commission? Just the conditions alone could show you that the banks put you in a high-risk group. A bank would only finance this if it is sure that it will not end up with a loss, meaning the forced sale proceeds plus what you have paid in interest so far are profitable.
You say nothing about your income situation, nor where you want to buy. But my tip for you: get married first, enjoy the honeymoon, and then think again about building/buying. Save at least €30,000-50,000 in equity, and then start fresh again. Low interest rates always also mean: the craftsmen demand higher wages, materials are more expensive, and existing properties cost more than they should. If interest rates go up, the boom will subside, and in 5-8 years there will be many foreclosures from people who financed for 10 years and then realize they cannot pay 6% interest, should that happen. Lord, at 23 I really had other things on my mind. Otherwise, one thing remains: after the wedding, talk to your families. Maybe they have already made provisions, and you can discuss an early inheritance (gift). Saves a lot of taxes.
Professionally, you also have to be sure that the place of residence is the final destination. We also had to decide... build now or go to Shanghai for 2-3 years first. We built... if we had been your age, the decision would have been Shanghai... definitely.
This is certainly a bit black and white, but the reality often looks like this.
You chose a cheap house... fancy. But why is it cheap? You chose an independent financial advisor? Are you sure he is independent and not just focused on his commission? Just the conditions alone could show you that the banks put you in a high-risk group. A bank would only finance this if it is sure that it will not end up with a loss, meaning the forced sale proceeds plus what you have paid in interest so far are profitable.
You say nothing about your income situation, nor where you want to buy. But my tip for you: get married first, enjoy the honeymoon, and then think again about building/buying. Save at least €30,000-50,000 in equity, and then start fresh again. Low interest rates always also mean: the craftsmen demand higher wages, materials are more expensive, and existing properties cost more than they should. If interest rates go up, the boom will subside, and in 5-8 years there will be many foreclosures from people who financed for 10 years and then realize they cannot pay 6% interest, should that happen. Lord, at 23 I really had other things on my mind. Otherwise, one thing remains: after the wedding, talk to your families. Maybe they have already made provisions, and you can discuss an early inheritance (gift). Saves a lot of taxes.
Professionally, you also have to be sure that the place of residence is the final destination. We also had to decide... build now or go to Shanghai for 2-3 years first. We built... if we had been your age, the decision would have been Shanghai... definitely.