f-pNo
2013-06-17 16:53:08
- #1
Hello,
I'll also give my two cents on this.
You've already heard quite a bit about the not insignificant ancillary costs. What is particularly unpleasant is that often the property providers (especially those operating nationwide) tend to omit various ancillary costs, or they hide them in the fine print, or they estimate them far too low (for example, for us, excavation transport and landfill fees for soil removal were set at 2,500 euros – you can easily expect 6 to 8 times that amount).
Regarding the financing itself. The currently low interest rates are very tempting. But they also lead to a lower compound interest effect. That means if you set your repayment at, say, 1%, you will be paying off the loan over 40 years at the current interest rates. I generally calculate with 6% (interest + repayment). At that rate, you are finished in about 25 years.
And here is the next point you should consider. What does your further life planning look like? Are the jobs reasonably secure? Could it be that you have to relocate for work (this could be a reason to postpone house plans, but it doesn’t have to be)? Can you manage the monthly burden in the medium term with only ONE salary (keyword: children)?
I agree with you – paying rent every month for "nothing and nothing again" is annoying. But you should not make any spontaneous decisions, but rather carefully calculate everything.
Regarding the initial equity: The more, the better. The less equity you have, the more interest the banks will want from you. If you already own a plot where you can build (so building land), this counts as equity. Nevertheless, you must have enough in reserve to cover suddenly arising additional costs. The most expensive financing is follow-up financing – because here you have no choice.
Oh, and the sweat equity. Don’t overestimate yourselves regarding your own work.
Regards
f-pNo
I'll also give my two cents on this.
You've already heard quite a bit about the not insignificant ancillary costs. What is particularly unpleasant is that often the property providers (especially those operating nationwide) tend to omit various ancillary costs, or they hide them in the fine print, or they estimate them far too low (for example, for us, excavation transport and landfill fees for soil removal were set at 2,500 euros – you can easily expect 6 to 8 times that amount).
Regarding the financing itself. The currently low interest rates are very tempting. But they also lead to a lower compound interest effect. That means if you set your repayment at, say, 1%, you will be paying off the loan over 40 years at the current interest rates. I generally calculate with 6% (interest + repayment). At that rate, you are finished in about 25 years.
And here is the next point you should consider. What does your further life planning look like? Are the jobs reasonably secure? Could it be that you have to relocate for work (this could be a reason to postpone house plans, but it doesn’t have to be)? Can you manage the monthly burden in the medium term with only ONE salary (keyword: children)?
I agree with you – paying rent every month for "nothing and nothing again" is annoying. But you should not make any spontaneous decisions, but rather carefully calculate everything.
Regarding the initial equity: The more, the better. The less equity you have, the more interest the banks will want from you. If you already own a plot where you can build (so building land), this counts as equity. Nevertheless, you must have enough in reserve to cover suddenly arising additional costs. The most expensive financing is follow-up financing – because here you have no choice.
Oh, and the sweat equity. Don’t overestimate yourselves regarding your own work.
Regards
f-pNo