DeMoehn
2015-05-17 10:51:12
- #1
Good morning everyone, thank you very much for your already numerous responses, that already helps us a lot.
We are also aware that such an undertaking (and we are not talking about right now but in about 2 years) is not the "normal case" and can be risky. However, a typical terraced house with a "towel garden" is not an option for us. We both originally come from other regions where you can already get a whole house (used) for the price of land in BaWü. We have both also grown up in owner-occupied homes and would not want to miss that (at least in the future). Simply moving to a more rural area is probably not possible for professional reasons either. Only the metropolitan areas of Frankfurt or Cologne would still be conceivable, which I think will not change the prices much.
You will have to explain the matter of equity to me again. Of course, I understand that more equity is basically sensible. Lower interest rates (because of increased security for the banks), less risk for oneself, lower installments/terms, more negotiating power. Often you read about 20-30% equity, which would be about 120,000 EUR for the previously planned 400,000 EUR. If we really gave up on a lot here, we might save about 1000 EUR per month. That would be 10 years until we have the money together. However, by then we will have also paid 114,000 EUR in rent (without rent increase for now). That means we have lost 114,000 EUR. (123,128 EUR with 1.7% increase)
If we now lived in the owner-occupied home and amortized 1500 EUR per month at 2.07%, then in 10 years we would have "only" lost 43,170.95 EUR but saved/paid off almost 137,000 EUR. Now, of course, one could also take into account that today the interest rates are really low at about 2% for 100% financing, and in 10 years we will certainly be back at 3-4%. At 3.5% that would result in a loss of 31,400 EUR. Of course, it is quite possible that we have forgotten some things here, which is why we are writing this thread.
We are also aware that such an undertaking (and we are not talking about right now but in about 2 years) is not the "normal case" and can be risky. However, a typical terraced house with a "towel garden" is not an option for us. We both originally come from other regions where you can already get a whole house (used) for the price of land in BaWü. We have both also grown up in owner-occupied homes and would not want to miss that (at least in the future). Simply moving to a more rural area is probably not possible for professional reasons either. Only the metropolitan areas of Frankfurt or Cologne would still be conceivable, which I think will not change the prices much.
You will have to explain the matter of equity to me again. Of course, I understand that more equity is basically sensible. Lower interest rates (because of increased security for the banks), less risk for oneself, lower installments/terms, more negotiating power. Often you read about 20-30% equity, which would be about 120,000 EUR for the previously planned 400,000 EUR. If we really gave up on a lot here, we might save about 1000 EUR per month. That would be 10 years until we have the money together. However, by then we will have also paid 114,000 EUR in rent (without rent increase for now). That means we have lost 114,000 EUR. (123,128 EUR with 1.7% increase)
If we now lived in the owner-occupied home and amortized 1500 EUR per month at 2.07%, then in 10 years we would have "only" lost 43,170.95 EUR but saved/paid off almost 137,000 EUR. Now, of course, one could also take into account that today the interest rates are really low at about 2% for 100% financing, and in 10 years we will certainly be back at 3-4%. At 3.5% that would result in a loss of 31,400 EUR. Of course, it is quite possible that we have forgotten some things here, which is why we are writing this thread.