Financing without equity with security?

Now, in the "what can be invested" one only has to consider all additional costs that arise when buying compared to renting. The installment compared to rent is by no means everything....

Difference interest + amortization to cold rent + non-allocable ancillary costs + one-time amount at the beginning (equity capital is logically also invested) + maintenance assumption: A house is depreciated to a value of zero over 100 years... the realistic value is probably less than 100 years; a house on which nothing has ever been done is definitely worth nothing after 100 years.... it rather causes demolition costs => total value therefore max. land value). For a house of "only" €300,000 (house only without land) this amounts to €3,000 per year, i.e. €250 per month, which one has to invest on average to maintain the real value. Certainly less at the beginning, but the big lumps come gradually. + (hardly monetizable): risk effects with a single house, extreme concentration risk of the assets... if a highway, an airport, the village is doing badly, property taxes are doubled, a nice new power line... whatever comes in 50 years, it can significantly damage the assets. + Should the case occur that one has to move after not too many years for any reason and sell the house, it pulls the return straight down to the deepest basement, since the ancillary costs can no longer be depreciated over the entire house lifespan but are directly "lost".

Correctly, of course, one must include inflationary effects, which makes the whole calculation not completely easy and there are many unknowns at which one can tweak and turn as one pleases.... one can make the numbers look good either way, the question is what is better on average.

The other way around it becomes a thread: (Among other things) this suggestion came from my parents – I myself had so far only had the classic model of 27 years, 15 years fixed interest period and then either a new contract or fixed interest via a building savings contract in mind, as I had not considered such a possibility before. Hence also the original post with the question about practical experiences with this alternative, which so far apparently has not come up here except for Sebastian79. However, it has already been used twice in my (extended) family. Although in each case it has only been running for about 10 years and I do not know the details 100%.

My girlfriend is looking forward, just like me, to a home with a garden in our desired location. The house is of course intended for our shared family and is also meant to be our retirement residence. Of course, my parents would only be involved if we build the house for ourselves and not as an investment.

: I’ll read through that later – thanks for the huge contribution

Parental home as collateral or not. The core problem remains: equity or income too low OR house too expensive. That is your construction site.

Regards, Steffen

What other conditions do you mean? Key data would be 27 years at 2.77%, payment <= 950€ (with 50,000€ KfW over 20 years), with 15 years fixed interest rate.

Something doesn't quite add up here.

If I assume a financing amount of 310,000€ and subtract the KfW loan, 260,000€ remain. At 2.77% interest and a term of 27 years, the payment is 1,140.50€. Without KfW loan or savings contract.

How do you arrive at a payment of 950€ including KfW? Or did I misunderstand something?

I haven’t read everything very closely. But one aspect of our house construction was, among other things, that we also think to some extent about our children. I come from a rural area, and my parents, their parents, and their parents before them simply considered it important that something "exists" for the children later on… in the sense of ownership. Be it land or houses. Even if it doesn’t really make economic sense for us, compared to paying rent all our lives (here rent prices start at 1200 cold for 90sqm), we will have property in 25 years that we can pass on. What our children do with the 1500sqm plot with house is then up to them. We also have another plot and forest… why? Because my parents and their parents and their parents before them thought the same way and always made sure that ownership "exists." My parents were able to build their house on an inherited piece of land and inherited further properties. These in turn now fall to us, the next generation, and our children will also receive land… simply because we take care of it. And as has been said many times, you simply fulfill your very own dream of homeownership, of your own house. I am happy to work for this life dream and make it come true.

So something doesn't quite add up here.

If I assume a financing of €310K and subtract the KfW loan, €260K remain.

Hello,

KfW change as of: 01.04.2016!

The maximum subsidy amount per residential unit is increased from 50,000 euros to 100,000 euros.
A 20-year fixed interest option is introduced for the 20- and 30-year loan terms.

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PS:
We built in 1993, had about 18% equity - 50% of the loan had a 5-year term and an interest rate of 9.2%!
After 5 years, almost 5% was repaid - but 46% was paid in interest.

This time I’ll get back the €10,000 (~DM 20,000) repayment subsidy...

If I assume a financing amount of €310,000 and subtract the KfW loan, €260,000 remains. At 2.77% interest and a term of 27 years, the monthly rate is €1,140.50. Without KfW loan or building savings contract.

How do you arrive at a rate of €950 including KfW? Or did I misunderstand something?

I didn’t calculate that - the banker did - so I can’t tell you anything about the calculation methods, etc. But I will gladly question it once (up to 10 times) more until it is supposed to start in summer....