Taking a loan for equity financing?

Hire purchase - Into your own home with nothing!

From tenant to owner – without savings, without debt. This miracle is supposed to happen through hire purchase. Many benefit from the model, only the customers do not.
Especially young families are being courted

It was already around in the 70s, now it has been revived: the so-called hire purchase model is back, brought out of oblivion and nicely polished by some financial advisors, real estate agents, and cooperatives. "A new generation of real estate sales has been born," cheers a promotional letter. What is advertised on the internet, through brochures, and even on Ebay seems quite tempting: “Realize your dream house debt-free” it says, for example, or “Own your property without bank debt, without Schufa.” Especially targeted are young families without equity, self-employed people, and all those who cannot get a loan from the bank.

The offered hire purchase models are designed differently but always follow the same pattern: first live, then pay. The interested party moves in as a tenant but only has to come up with the purchase price in the future, for example after ten or 20 years. The rent is partially credited towards the amount over the years.

Sounds great and simple, but according to all experts it is a risky losing deal. The dream of owning your own home without a cent saved up is expensively bought, warns Josephine Holzhäuser from the Consumer Advice Center Rhineland-Palatinate. She dismisses it: “A normal bank loan is cheaper, especially now, since interest rates are still quite favorable.” Calculation tricks and beautifications by the hire purchase providers do not change that.

Hardly any advantages, many disadvantages

“Why pay rent when the apartment can be financed for the same money?” – Whoever falls for such grand promises takes high risks, warns lawyer Jost von Lyncker from the association “living in ownership.” There are hardly any advantages, but plenty of disadvantages. The monthly financial burdens are considerable. Rents are often inflated, follow-up costs hardly calculable. In the worst case, you pay off until retirement age.

So for me it is suspicious, KfW-40 has not been subsidized for a long time, ergo there are no subsidies either.

Under the property description, turnkey is suggested, but in the service description, it is relativized to a shell construction.

Although there is nothing really concrete in the service description.

Do you have the service description for your offer so you can post it here?

Best regards

Hello,
so the thing with KfW 40 is correct, it must probably be KfW 55 or something!!!
And I do have a service description but unfortunately I cannot post it because my scanner cable is broken, but it says that the earthworks as well as the storage, development of the plot, notary and land transfer costs and so on are all included, and the brand of the windows, the socket systems available for selection, that the stairs and handrails as well as bathroom and toilet fittings are included, how many switches, sockets, lamp connections, hot water connections, radiators + connections and so on are listed, there is a lot in there basically everything that belongs to it, then also which colors are available and that the samples are available for selection and so on and so on!!!

Regards worry

Oh yes, and it’s not about rent-to-own!!!!!

For me, it is questionable what exactly is written in the land register or what you pay the real estate transfer tax for if you don't actually own the land anyway, which in itself is already pretty negative.

The second question I have is how exactly the financing is supposed to work? You mention taking out a loan of €100,000; €35,000 KFW; €10,000 as a down payment (which you probably will never see again); and the rest as a regular bank loan. Depending on what you consider the remainder, that makes around €160,000 +/- X debt, which you can NEVER repay with €425 monthly, realistically you will be at €750 and pay for a good 35 years. On top of that come your additional costs of around €300-400/month plus the community costs for your complex, which will surely also be about €150 (yes, I know you were told otherwise, but with such projects the bitter truth only becomes clear after completion and contract signing). So that makes around €1200-1300 monthly burden with my rough estimate, how do you want to manage that with an actual income of €1600 as the primary earner????????

Don't get me wrong, I don't want to deny anyone the happiness of homeownership or spoil it, but I am always in favor of opening the eyes of gullible people like you, especially if worry86 stands for the year 1986, you still have plenty of time to first build capital yourself and possibly get your partner into a properly paid job.

Now to the description of services:
Even professionals find it difficult to oversee, and I assure you, something is always missing. On top of that, usually only the absolute minimum standard is granted. It starts:
1. with the electronics, where sometimes there are only 1-2 power outlets in the bedrooms, and these come in plain white/beige from the hardware store,
2. continues with stairs that are probably made of pine,
3. on to heating, which can't boast the latest condensing technology, or worse, as I saw in a project by the company, uses pellet heating. Oh, and underfloor heating will naturally be an unknown term.
4. Then we have the windows, PVC double glazing in white?
5. Roof with concrete roof tiles in brick red?
6. Bathroom fittings and floor coverings? Just take a look at what is available; at the latest, this is where the first family crises occur if money is already tight.
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This is not how you imagine a new house, right? And every "extra" you pay for with a hefty surcharge.

Let it be, blurboy There are people who are resistant to advice and full of AWG hormones. The answer that worry86 wants to hear is: Yes, buy the house, everything will be fine

Is the contract already signed then!??!?!

Certainly, at this low price he immediately bought two houses and then rents out one for 800 €, so he is really making a profit on it. However, I do not believe that worry86 will publicly admit his mistakes here. Unfortunately, people will continue to fall for these practices and ruin their lives.