Savings beginner with questions about the plausibility of the "rough" plan

  • Erstellt am 2015-12-27 15:23:07

Vanben

2016-03-05 15:18:29
  • #1
I think, if it is this tight, one should look for alternatives: condominium instead of semi-detached house/townhouse instead of single-family home, (old) stock instead of new construction or simply move somewhere where it is cheaper (or just remain a tenant). Unfortunately, it is now the case that certain areas are simply no longer affordable even for comparatively well-earning employees.
 

Mattheu

2016-03-05 15:28:43
  • #2
Yep... I will soon go to the bank with a specific used property and see what the gentlemen come up with. I will report.
 

MarcWen

2016-03-05 15:43:25
  • #3


They will most likely come up with the "actual" value for you. Unfortunately, there is often a significant gap between theory and reality. For us, it was about 25%. The gap then has to be closed, which usually happens with equity. But you have to be willing to do that or critically question it.

For us, the numbers looked like this, for example:
- Existing property sale price 399,000 euros
- Possible negotiation room down to 370,000 euros
- Additional purchase costs in NRW about 12% 44,000 euros
- Investment (conversions, renovation, refurbishment) necessary about 100,000 euros

Valuations by various banks between 280,000 and 330,000 euros

You can calculate the rest yourself. And with the knowledge of buying a 20-year-old property with all the risks and upcoming investments (windows, heating, roof,...)

We don't even need to talk about energy saving, energy consumption index 136 kwh.
If interested, I can send you the property link via PM, it is still for sale.
 

Vanben

2016-03-05 16:04:31
  • #4
: This is more of an extreme outlier upwards than a "normal" example. First, you pay almost 40-120k more than it's worth, put another 100k in, which strangely doesn’t reflect in the value, and then you wonder about a lousy loan-to-value ratio?!
 

MarcWen

2016-03-05 16:14:28
  • #5


That may be true, but unfortunately it is common practice in many areas. There is practically no real supply but huge demand. The prices are therefore inherently 20-30% above value and are often purchased as such.

Logically, I can't understand that either. We were seriously interested in the house. The owners and agents were very arrogant. Instead, the place is now empty again for another winter. I don’t need to explain what that means. A truly beautifully landscaped exterior, but totally overgrown over time, so you first have to send a gardener through thoroughly.

In the end, we’re glad we didn’t buy the house (but that was due to the little willingness to compromise on the sellers’ side). Now we are building new exactly as we need.
 

Ddorfer

2016-03-08 12:59:50
  • #6
This is a very interesting discussion here and I would like to contribute my opinion, which certainly differs from most of the views expressed here.

First of all, the question was how one can even afford a house:
1. An above-average income is certainly a good start (most people here probably have that; with below-average income one should usually reconsider the house in most cases)
2. What do you spend per month? (we have a nice apartment, go on normal vacations, also eat out sometimes, etc., and yet there is still quite a bit of money left over; on the other hand, there are people who hardly have any money left at the end of the month despite a good income... why?)
3. Saving alone is not enough. You should invest sensibly, i.e. build a well-structured portfolio. You simply don't get far with a savings account.

Equity and repayment:
1. According to my current calculation (Excel model with different equity ratios and repayment rates), it is worthwhile for us to contribute as close to 0% equity as possible and not repay more than 1%. The money saved thereby must of course be invested somewhat securely.
2. Surely we have enough equity in reserve and could repay more, but why should we if it results in a worse outcome overall.
3. Of course, you have to observe the interest rate development. I don't think we will be facing rising interest rates in the next few years; rather, they will go down a bit more. If the interest level rises significantly towards the end of the term, one must act quickly and use special repayments.
4. For this reason, I would currently also use a short fixed interest period: 5 years.
5. Naturally, I would repeat my calculations with current data before it becomes concrete for us.
6. This whole approach is not riskier than contributing a lot of equity, as long as the saved equity and saved repayments are invested and not spent, of course.
 

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