When to use equity?

  • Erstellt am 2020-01-19 10:08:53

ghost

2020-01-19 12:00:50
  • #1
Is there a reason why so much equity is being used here?
Equity ratio > 80%

Due to the low interest rates, it might actually make sense to borrow more, assuming corresponding income.
Of course, it depends on age, income, and need for security.
 

Guido1980

2020-01-19 12:02:45
  • #2
The new KFW conditions for the 153 are indeed interesting. Actually, we had already dismissed it because the subsidy for this house was not proportional to the investments required to meet the respective standards.

I will have it recalculated by the energy consultant/architect.

So you also think that it is most effective to not finalize anything for now and simultaneously pursue the KFW matter and implement it if necessary. The interest rate is expected not to rise for the time being and the KFW subsidies are only now being adjusted and will probably hardly be completely revised again in the near future.

If financial needs arise during the construction phase or if it makes economic sense, it should be relatively easy to get a good offer since there is already a corresponding countervalue.

That certainly makes more sense than drawing a loan now that may not even be needed or paying commitment interest meanwhile that is higher than what the construction interest rate may have risen by then, right?
 

Guido1980

2020-01-19 12:06:00
  • #3
That is precisely the question whether it really makes sense to allocate all the equity. So far, the thought has always been, why borrow money at interest if you have it and don't earn interest on it. I'm not the type for risky investments.
 

nordbayer

2020-01-19 12:26:43
  • #4
KfW must be applied for by your bank before construction begins, including proof from an energy consultant. Then take out the full loan immediately, because refinancing is expensive.
 

Specki

2020-01-19 12:36:15
  • #5


It only makes sense if you are financially fit enough to invest your equity elsewhere for a higher interest rate than the interest you pay on your loan.
If you take the mentioned 200,000 on a 10-year full repayment loan with your credit rating, I estimate that the interest rate will currently be < 0.6%. But you have to decide that and also weigh the risks.

Regards
Specki
 

nordbayer

2020-01-19 12:44:06
  • #6
I was faced with a similar decision and chose a peaceful debt-free sleep despite building a house. Missed returns from credit-financed speculation don't matter to me, and I can still speculate once there is sufficient positive equity beyond the house again. Call me boring, but I don't need the missed money right now, and debt from gambling would be annoying.
 

Similar topics
16.01.2014Problems with bank - equity10
06.03.2014Can we afford the solid wood house KFW70?32
11.07.2015480,000 loan too high, experiences?36
21.02.2015Impacts on loan when equity is in property17
22.02.2015KfW loan as equity capital. Which bank does this?15
18.03.2015Buying property feasible - Loan with building savings as equity?12
26.07.2016Calculation of equity capital in connection with KfW loan28
29.08.2016Can we afford this? Income / Investment / Equity131
01.05.2021KfW loan + repayment grant for granny flat39
22.04.2019Real estate loan with high collateral but low ongoing income35
16.04.2020Is the KfW loan still salvageable / changeable?10
29.05.2021Enough equity? Will we even get a loan?30
16.09.2020600,000 how to finance? Income 600,000, combination with KFW?28
24.09.2020Financing of 400k with 60-120k equity capital through a combination of BANK/KfW/savings contract22
17.04.2021New KfW Building Loan Conditions17
06.07.2021KfW loan is expected to become cheaper from 01.07.58
12.09.2021Purchase financing: how much equity (with the low interest rates)?27
18.12.2024Construction financing without equity as an option?162
11.06.2022Use of Credit vs. Equity41
06.05.2024Financial planning for new construction with good income and little equity81

Oben