The own house financing is the dream of many families. Because your own home meets your personal requirements and no landlord can talk in or ban something. And that’s not all: children have enough space to romp about, even if the house also has a garden. There are as many pets allowed as desired and in old age, rent is no longer due, which could affect the pension income. The pursuit of the implementation of a house financing is accordingly extremely large, not only with young families.
A house financing is quite possible
You think you can not afford to own your own house nowadays? This rumor persists, but that’s not true! Because financing a house with the current financing options is no longer just reserved for wealthy sections of society. Financing a house is also easily possible for families with medium and even small incomes – you just have to know how! Here you will find useful tips on the topics of house financing, house construction and mortgage lending, so that your dream of your own home no longer just remains a dream.
The house financing calculator shows the cheapest way to the home
Buying a home and the associated house financing is usually the largest investment that a person or family makes in their lifetime. In the implementation of house financing, our construction credit calculator helps you to find the right financing model. Because very few people can pay such a large project directly with their equity. As a rule, a home financing loan is required from a bank which has to be paid off for years or even decades after it has been taken up.
What is a Home Financing Loan?
A loan – whether for the financing of a property or other purposes – can always be added only with interest. In plain language, you pay more back to the bank than you borrow from it. The interest is basically the price you pay to borrow the money. The interest is always a certain percentage of your loan. So too, if you want to finance a house.
How are the interest rates when financing a house?
As the loan to finance a home decreases every year, interest rates also decrease. The percentage value, however, remains. The amount of interest on your house financing is determined by your lender, usually a bank. This is always based on the current interest rates, which is currently very low, which of course represents an advantage for you as a borrower.
Many banks also offer you some terms to finance a home, allowing you to maintain the fixed interest rate for many years at the time the loan is taken out. So you are independent of fluctuating interest rates and you do not have to worry about paying much more interest on house financing at some point than was agreed at the time the loan was taken out.
Financing a house without equity – is that possible?
Equity is the most important factor in house financing. Because the more money someone has saved, the less debt he has to borrow and then pay off interest again. Also, a high amount of equity often results in lower interest rates at the bank. So if you have a lot of equity, you have a clear advantage in terms of house financing.
How much equity is needed to finance the house?
As a rule, financial experts recommend that you finance up to 20-30% of the amount that is likely to be needed for home construction before you take out a loan. The reason for this is the security for the bank, which wants to get back their money as early and reliable as possible. But the protection of the debtor himself also plays a role. A high loan amount is paid off over a relatively long period of time and this can lead to uncertainties that are not always foreseeable. Therefore, most banks attach importance to the fact that individuals do not lifelong debt with a loan to finance a property. House financing without equity is therefore difficult.
Are there any alternatives for home financing?
If you have little or no equity at your disposal, because the low income and the high cost of living do not make savings possible, you do not have to despair: even then there are ways to finance the house, but this usually takes a little longer than the direct way Taking out a loan. Because even with little or no equity, you can conclude a home savings contract.
Depending on the income situation, it may not be possible to finance a new house, at least in a few years’ time. However, you can of course also buy an existing house or apartment with your building loan and your savings. Especially the latter is much cheaper than to build a house, but in many cases can represent an almost equally beautiful home.
Good to know: What is a home savings contract for house financing?
A building savings contract for house financing, which should allow a full financing of the property, consists of two phases: First, you save a few years a certain amount – so a kind of equity – that lands on a savings account of your building society. Once the agreed amount has been saved, you are entitled to take out a home financing loan and can finally start your own home project or buy an apartment or a house.
How high should the repayment installment be?
In principle, the monthly mortgage repayment installment should not be too low. As a rule of thumb, bank debt should decrease by at least 2% every year. However, it is equally important that you do not worry too much, but calculate exactly what your repayments may be, so that you can lead a normal life. After all, those who can not go out or go on holiday and can not finance their children with music lessons or a similar hobby quickly lose their desire to finance home construction.
As nice as it is to have your own house: No one wants to spend all his free time exclusively in the house, because there is nothing left for more money. And that is unfortunately often the danger, if you approach the home financing without equity. Anyone who sets his rate particularly high, also risked at some point, no longer able to handle them and become insolvent. A tragedy on the way to your own house, because then the bank has the right to foreclosure it.
Questions to ask before setting the repayment installment:
- Is there an income at the moment that may eventually disappear? (For example child allowance)
- Are you planning to work less in a few years? (For example, because you plan to have children or want to go into semi-retirement.)
- What are the expected additional costs for your living? (These are usually much higher in a house than in an apartment.) As far as the home is concerned, even higher ancillary costs are to be expected, including the costs of heating, water, electricity, and the like Garbage collection, insurance and property tax due every year)
Is the repayment installment correct?
It is important that a Home Financing repayment installment be calculated to be not too low, yet to allow you to live a relaxed and beautiful life, even if a portion of your income is lost. Of course, your financial adviser at your bank will help you to calculate the appropriate rate for repaying house financing, or inquire now about the holistic calculation of house financing.
The additional costs of house financing
Unfortunately, it is not just the purchase price or the price of the construction project, which is incurred when building a house or when buying a home and you must pay attention to the house financing. When financing a house, be sure to be prepared for it and plan for a not inconsiderable amount of incidental expenses.
What are additional costs that have to be taken into account?
Additional costs of house financing are usually dependent on the sum that costs your house or your construction project and can be composed of the following components that you should consider:
- Note the land transfer tax on home financing: It is about 3.5 to 6.5% of the purchase price of your home. The exact amount differs depending on the state. You have to pay this tax once, but you will be subject to land tax annually thereafter.
- You should also consider the costs of a single entry in the land register when financing the house.
- The costs for the notary should also be integrated in the calculation of the house financing: As a guide, a notary usually claims about 2% of the purchase price.
- Even a brokerage commission can be included in the house financing: If your desired property has been brokered by a real estate agent, usually a brokerage commission of up to 6% of the purchase price is due. The orderer principle, which came into force legally in June 2015, unfortunately only affects rental properties. As a buyer you therefore have to pay the entire brokerage fee in most cases.