Finance and buy or continue renting in the Stuttgart area?

2021-05-27 10:55:24

Add as a criterion how high your remaining debt will be after the fixed interest period expires. I would want at least 50% paid off for my own peace of mind. For that, you will need about 15 years of term. After 10 years, you have a unilateral special right of termination anyway, in case the credit rate is more favorable for you then.

You can also split into 3 loans at the same institution: 1x KfW (do they offer a premium for your home construction?) for 10 years, 2x for 15 years. You cannot prepay the KfW loan partially, but you can save extra for the end of the term and possibly redeem this component. Especially if you notice in the second half of the 10 years that interest rates are rising sharply, you can grit your teeth and save extra for the redemption after the term expires.

If not, you extend and are underwater only with this part at a higher interest rate. If you redeem the KfW loan, you could pull an option to change the repayment rate (to be agreed) for one of the other two components (on the larger of the two) and then repay it more quickly. Or, if things get tight, you reduce the repayment for that component.

That way, you have quite a few options.

Scout, thank you very much for your input, that really helps me a lot. I am currently also leaning towards 15 years and you are certainly right that the amount of the remaining debt is an important criterion that must be considered on its own.

I already have an offer for a 15-year term including the KfW component, I just hadn’t mentioned it yet because it is not really comparable to the other offers at this point.
The conditions would be:

Loan amount €337,000 (mixed interest 1.23% / 1.26%) split into:
Annuity loan: €217,000 at 1.3% / 1.33%; 15 years fixed interest, remaining debt: €109,243.85
KfW loan: €120,000 at 1.1% / 1.14%; 10 years fixed interest, remaining debt: €66,890.53

That would bring me close to 50% without yet counting the additional 5 years of financing after the KfW loan.

One more question about KfW: According to an advisor, the documents for the KfW 55 application must be submitted by 07.06., as a restructuring will take place starting 01.07. No applications can be submitted in the 3 weeks in between. Is that correct?

2021-05-27 11:14:29

So you borrow money to buy a basically volatile asset and at the same time invest capital speculatively instead of using it to reduce the loan. Such a structure is normally called a hedge fund and is usually only open to institutional investors...

A hedge fund on two legs

Hedge funds often do well... few fail and as you can see, such instruments can also be used privately, so they are not exclusively reserved for institutions ;-) We are already overregulated in the capital market anyway thanks to the EU. It is a personal risk assessment that each individual must make for themselves. You must keep in mind that the stock market can be 50% lower at the worst possible time than it is today. In the end, a healthy mix makes the difference. I understand the approach of the thread starter and partly act accordingly myself.

2021-05-27 11:29:37

kfw loans can also be longer. from 01.07 there are new conditions that might even be better for you. only the interest rate is not yet clear.

2021-05-27 12:05:18

Another question: What is your interest rate for 30 years and the 3 [Konstellationen]?

2021-06-01 22:27:02

other question: what is your interest rate for 30 years and the 3 constellations?

I haven't had it calculated yet, as I assumed the interest rate surcharge was too high for me.

Another question to everyone:

I just had a financing meeting at the local Sparkasse. The conditions were, as expected, worse (about 0.3% worse), but with a two-year interest-free period. That would more or less mean no risks for me if the construction should be delayed.

What advantages does financing through a local Sparkasse offer? Are there any at all? I ask because we also talked about the other financing offers in the meeting. When I named an example bank from a financing offer, the advisor almost fell off her chair and couldn't believe that I would come up with the idea of financing through such an "unknown" bank. The bank is a Germany-based bank ... I don't know if I am allowed to name it here. I didn't find the bank questionable and actually assumed that financing advisors like Dr. Klein would not suggest "dubious" banks?

Best regards

2021-06-02 10:33:32

What advantages does financing through a local savings bank offer? Are there any at all?

In terms of conditions, the savings bank can be just as attractive as a direct bank. However, a major advantage is the direct, personal contact person. This is a huge benefit for financing that does not conform to the standard 08/15 norm.

(approx. 0.3% worse), but with 2 years of interest-free provision period. That way, I would have more or less no risks if the construction should be delayed.

Calculate the additional year of construction interest in € . For €100,000 and 3% construction interest, that's a €3,000 saving, provided the first payment is made only after 2 years. However, there is a 0.3% interest surcharge compared to better offers with one year of interest-free construction period. Over 15 years, that's €4,500 in additional interest (annuity effect not considered). If you need money before the end of the interest-free construction period, the gap increases even more. Better to include a construction interest item in the calculation and finance the construction interest.

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Finance and buy or continue renting in the Stuttgart area?

moccanna

Seven1984

Rumbi441

Rumbi441

moccanna

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