Buying an old house vs paying rent

Hello everyone,

first of all, big compliments to your forum, which I finally found after days on the internet. I find the way people interact and the answers here simply appropriate :-)

I rent (570 € warm, [Wohnungsgenossenschaft]) a nice 80 sqm old building apartment with a living kitchen, the problem is that my neighbor (family + 2 children) living above me constantly stomps on my nerves and on my head, and this is unbearable in the long run.... therefore I plan the following...
I have an offer for a terraced middle house including plot/old building for 94K €, but extensive modernization (sanitary, heating, windows) is necessary, which will cost more money. I am currently estimating a total financing amount of about 135K €. I myself am not yet 40, craftsman, married, 2 children aged 16+20, 2 incomes without child benefit about 2600 net. I quit my current job after 12 years, but have a new one (permanent contract). My equity situation is not so good. My question is... can I even get financing or do I really have to keep paying rent?

Hello Pegasusxl,

in order to answer your inquiry correctly, you need to provide us with a few additional pieces of information:

1. Are the incidental acquisition costs (notary fees, property transfer tax, and possibly broker commission) already included in the total costs of EUR 135,000?

2. Do you have any other payment obligations - for example installment or consumer loans or maintenance payments?

3. Are you still in the probationary period at your new job?

Please provide us with this information, then I can respond more precisely.

Best regards

M. Thiemann

Hello M.Thiemann,

There are still payment obligations, including a car loan of 5,000 euros. The value of the vehicle is about 9,000 euros; the rest was paid by equity, and a consumer loan with a remaining term of about 10 months of approximately 700 euros, and another with a remaining amount of about 800 euros.

There are no maintenance obligations.

A probationary period with the new employer was explicitly not agreed upon in the employment contract.

I had included the acquisition costs with a sum of about 9,000 euros.

The offered property would suit us very well, meaning the children will eventually move out and the living space of about 90 sqm with the option to convert the attic would be sufficient for us. The residential area also fits. We had this in mind under the motto "small but mine" and the rent/own ratio. One more question: would you recommend having the financing arranged by a financial broker, or should one visit the bank oneself? Sorry for the one or other question, but I have never dealt with the subject matter until now.

Best regards, Pegasusxl

P.S. The credit record is clean...

Hello Pegasusxl,

I had completely forgotten to ask the most important question and you answered it anyway. Very good that your Schufa is clean!

Also, the fact that you have no probationary period is a decisive criterion.

The financing could then look as follows:

Total cost determination:

94,000 EUR purchase price
9,000 EUR incidental acquisition costs
32,000 EUR modernization
135,000 EUR total


Financing determination:

40,000 EUR KfW loan (3.70% + 1.48% repayment) = 172.67 EUR
70,000 EUR construction loan (4.80% + 1% repayment) = 338.33 EUR
25,000 EUR subordinated loan (7.49% + 3.85% repayment) = 236.25 EUR
135,000 EUR total = 747.25 EUR monthly rate

I assumed that you do not use any equity, which makes the somewhat more expensive subordinated loan necessary. Perhaps you can still bring equity into the financing - possibly from relatives - and thus avoid the subordinated loan.

Please also note that you have to compare the above amount with your current cold rent, because additional ancillary costs still apply.

I recommend that you at least have a financing offer created by your bank so that you have options for comparison and can find the most affordable financing solution.

Please let me know again how high the monthly rates for your loans are so that we can also check the household calculation at the same time.

Best regards

M. Thiemann

Hello Mr. Thiemann,

I have sent you a private message regarding the missing data. Quite clearly, KM 400 currently compared to 747.25 rate would be about 350 more but for that, you eventually own the property...

Regards

Pegasusxl

Hello Pegasusxl,

I have received your message.

I was not aware of the problem with the postal code. Thank you for letting me know. I will have to improve that!

Just enter a postal code that does not start with "0" for now. Sorry about that.

Banks sometimes use quite different values for the household calculation: For example:

550 EUR subsistence minimum for the head of the household
350 EUR for the partner
150 EUR per child
2 EUR/sqm living space for the ancillary costs of the property

In addition, other payment obligations from installment loans are taken into account.

The remaining amount must be high enough to cover the financing rate.

This would be the case for you ;-)

Best regards

M. Thiemann