How to best save equity

  • Erstellt am 2011-09-25 11:56:12

Katha2412

2011-09-25 11:56:12
  • #1
Hello dear ones,
my name is Katharina, I am 25 years old and have a 1-year-old daughter. My boyfriend Michael, 30 years old, is the father of my daughter.
We are interested in the topic of home financing. We want to buy/finance a house in about 5-6 years. My boyfriend is expected to receive a permanent contract with a 90% probability next year, I will finish my apprenticeship next year and then earn 1600 euros net. He currently earns 1600 euros net as a non-permanent employee. We are not married yet, but we plan to be.
Unfortunately, we know almost nothing about the topic, meaning we have 1000 questions for you, I’ll just start and hope you can help us.
- How much equity should one have nowadays to build?
- What are the disadvantages and advantages of 100% financing, meaning financing without equity?
- What counts as equity?
- What are the requirements for a normal financing and for 100% financing?
- How can you save equity the fastest? Stocks, funds, building savings contracts?
We are thinking of a property up to 280,000 euros.

Just tell us something, at the moment we pay no rent, the apartment is in his parents’ house. Our expenses including rent if we decide on a rental apartment next year would be estimated at 2000 euros with everything included, so we would have 1500 euros left monthly.
Oh, maybe it’s worth mentioning that I now have a building savings contract in which the employer pays 40 euros advance, we both have a private pension insurance into which we (I 60 euros), he (80 euros) have been paying monthly for 2 years.

Best regards Katharina and Michael
 

emer

2011-09-26 10:27:29
  • #2
For a construction project with a "budget" of €280,000:


The more, the better.
That has two advantages:
1. You don’t have to borrow as much from the bank.
2. Banks see equity as security. The more security you can offer, the easier it is to find a lender, the interest rates and also the monthly burden are lower.


1. Finding a bank that does that.
2. Once you’ve found one: high interest rates.
3. High monthly burden.

I don’t see any advantages.


Anything that has monetary value.
Assets, savings contracts, cash, land, mortgages...


That varies.
A steady job with a certain basic income is definitely sensible. Then it depends on what subsidies you want to use (e.g., KFW and/or state subsidies), these institutions have fixed requirements.


The fastest way is the good old bank robbery (this is not an incitement ).
Otherwise, all that's left is - save as much as possible and possibly put it where you like (stocks, funds, building savings, slot machines).
The faster you can increase your money somewhere, the greater the risk of losing it all or a large part.
 

C&C

2011-10-04 10:48:44
  • #3
I prefer the good old instant access savings account. A bank from Scotland currently offers 2.6% interest p.a. German banks are around 1.5% p.a. Anything above that is a bait offer (limited in some way: only fresh capital, only 3 months, etc.)

With foreign banks (the Scottish one) you have to note that deposits are only secured up to about 85,000 EUR according to the current exchange rate. But you have to check that regularly on your own.

I have had an instant access savings account at this bank for some time and am very satisfied. Withdrawals, even larger sums, have always worked with a 1-2 day delay.

Independent of a specific bank, I recommend a savings plan. That means the bank automatically debits the amount you specify from your private checking account monthly. This is a good way to test how the future credit rate "feels". Personally, I don't like fund savings plans so much because each month the sales charge would be added, which in my opinion offsets the advantage. Also, I am more security-oriented.
 

Jimmy80

2011-10-04 11:12:28
  • #4
Building equity actually works well with a [Tagesgeldkonto]. However, once you have accumulated a larger amount there, you should preferably deposit it in a [Festgeldkonto] for another 2-3 years because the interest rates are higher.

Regarding the amount of equity: Of course, more is always better, but you should have at least 20-30% to be able to really take advantage of good conditions.
 

Meecrob

2011-10-24 14:13:14
  • #5
A theory related to that, which I am currently thinking about myself. Usually, there is a KfW loan involved (with my house purchase of 75,000 EUR) and one is gladly registered second in the land register. That means the house bank only finances the remaining part. Now the equity coverage is much more positive (the bank is in first place in the land register) and there should be good conditions. I am curious if the bankers will want to follow the argumentation : )

On the topic, I think 280,000 EUR is a bit ambitious given the salary. You don’t mention that you will _significantly_ earn more soon. Are you thinking of 280,000 EUR including all incidentals and possibly renovation?

Just calculate how long you would need to pay off with a fixed rate that you can afford. And keep in mind that you should also build reserves and generally invest more money in things that are still unimportant to you now.

We have 3,600 net and decided on a 900 EUR monthly rate. The plan is to pay more later + make special repayments to finish faster.
 

C&C

2011-10-24 15:39:46
  • #6
The Scottish bank I mentioned back then has been a member of the deposit protection fund of the Association of German Banks since October. This increases the security per customer to 250,000 EUR in deposits.
 

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