Home Purchase Financing - Experiences, Feedback

Based on my own unpleasant experience with an Interhyp broker: better to double-check whether the specific broker is somewhat reputable, and always take into account that the broker's offers may turn out to be empty promises as long as no contract has been sent. Then Interhyp says: sorry, not responsible, please contact the broker & the broker disappears. Therefore, I would definitely always inquire directly with banks in parallel, not just rely on a single broker.

You seem very motivated to deal with this topic. I can warmly recommend the book by Gerd Kommer: Immobilienkauf und Finanzierung für Selbstnutzer. For me, an eye-opener with a very factual and scientific approach to this topic. Considering how much money is involved for you, it is definitely worth investing the time to read the book. Among other things, he recommends bringing in as much equity as possible, but at least 20% of the total costs into the financing, simply for reasons of risk reduction. A property represents a significant concentration risk. The long-term returns are very modest despite the last very good 10 years and, in your situation with experience in the stock market, are very likely not financially advantageous. Would simply renting a house be an option for you? In this context, I can also recommend Kaufen oder Mieten by Gerd Kommer.

Therefore, I would definitely always also contact banks directly in parallel, not just a single broker.

Thank you very much for the warning. We will take that into consideration.

I can warmly recommend Gerd Kommer’s book: Immobilienkauf und Finanzierung für Selbstnutzer.

Thank you very much for the tip! Ordered immediately.

The long-term returns are very modest despite the last very good 10 years and, in your situation with experience in stocks, are very likely not financially advantageous.
Is renting a house at all an option for you?

Buying vs renting is actually already decided for us.
That the owner-occupied home is a capital investment is a nice side effect for us. The home is certainly not a top earner, but here our primary motivation comes into play:
We want to settle into a house, make it nice, shape it ourselves, decide for ourselves. For that, we consciously and gladly spend the money, of course as optimized as possible. We actually already had a rental house. We were served a notice citing personal use when it was sold (we were not ready yet). That was not a nice experience.

I also don’t believe that with our wishes (we will probably invest further into the property after purchase) we will achieve a positive result from an investment perspective, at least not better than our other assets.
Actually, this is not our primary concern. Here we are fulfilling a dream. I personally at some point stopped living my life primarily for optimized returns (i.e., spending almost nothing). You only live once.

Today it is a balance: I allow myself the things I really want. I check whether wishes are “real” by not fulfilling them immediately.
The issue of buying a house has been simmering between both of us for some time. Now the time has come.

Whether wishes are "real" I check by not fulfilling them immediately.

Could be pinned somewhere everyone can see and be reminded of. Maximum content in two lines.

A security must be solid, secure, and predictable. Like a property with a land charge. So you actually have to pledge your cash assets so that the bank has access to them. If it is not cash but securities, very high discounts (due to possible price fluctuations) are sometimes applied. These can also be a 60% discount or even 100% for risky securities (warrants would be such). Then you can no longer access them, not even for reallocations (unless you negotiate it).

This has changed with substitute securities. With my first property (100% financed), I pledged my building savings contract and various funds. It worked without problems and the release against special repayment or after normal repayment was also uncomplicated. Last year (also 100%), I only had to prove it but not pledge it.

Has anything changed with the substitute securities? For my first property (100% financed), I pledged my home savings contract and various funds. It went smoothly, and the release against special repayment or after regular repayment was also without problems. Last year (also 100%), I only had to provide proof, but not pledge it.

No. Land. No. The bank is not allowed to count substitute securities at 100% - unless it is pledged cash.

That a financing with additional security is possible, I did not deny. But the fund is valued at maybe 60-70% of the current market value depending on the type. If you don’t do it and the financing goes into review, there will be warnings from the supervisory authority. These are usually F1 violations at the Federal Financial Supervisory Authority.

Release after special repayment fits into this. The bank’s risk goes down, and you get the additional security released again. But initially, this has nothing to do with the condition. The loan-to-value ratio remains identical – and thus the poor condition (the additional security is rather the reason to do the financing at all).

By the way, in our partner business, we do not accept any additional security at all. Neither home savings contracts, life insurance, cash, let alone funds or shares. Exclusively mortgage charges on other properties.