ᐅ Affordable Homeownership: Buying an Existing House or a Prefabricated Home?
Created on: 30 Dec 2018 11:07
S
Soraya
Hello everyone,
we are not proud homeowners yet. We currently live in a large and actually very nice rental apartment, but we can’t stand the neighbors above and below us anymore.
At the moment, we are looking in every direction. Specifically: a new rental apartment or an affordable house to buy (or maybe even a prefabricated house?).
I personally prefer the idea of buying. My partner is a bit more uncertain about that (risks, etc.).
Our situation is that unfortunately we have very little equity right now (around 10,000 EUR). I have been self-employed for about ten years (average to good income), and my partner still needs about 7 months before becoming a permanent civil servant for life (upper service).
What do you think would be the best yet affordable solution?
My thoughts are as follows:
Renting an apartment means paying money month after month without effectively gaining anything.
Buying an older house offers many great possibilities later on, but also a lot of work.
Buying a prefabricated house means the quality might not be as good, but you get something newer that better meets your personal requirements.
I would be interested in your (experienced) opinions on this topic.
Best regards
we are not proud homeowners yet. We currently live in a large and actually very nice rental apartment, but we can’t stand the neighbors above and below us anymore.
At the moment, we are looking in every direction. Specifically: a new rental apartment or an affordable house to buy (or maybe even a prefabricated house?).
I personally prefer the idea of buying. My partner is a bit more uncertain about that (risks, etc.).
Our situation is that unfortunately we have very little equity right now (around 10,000 EUR). I have been self-employed for about ten years (average to good income), and my partner still needs about 7 months before becoming a permanent civil servant for life (upper service).
What do you think would be the best yet affordable solution?
My thoughts are as follows:
Renting an apartment means paying money month after month without effectively gaining anything.
Buying an older house offers many great possibilities later on, but also a lot of work.
Buying a prefabricated house means the quality might not be as good, but you get something newer that better meets your personal requirements.
I would be interested in your (experienced) opinions on this topic.
Best regards
The bank (I work at one) will review the financial data from the last 2-4 years, not just 2017. The administrative effort for self-employed and freelance professionals is quite significant, so it’s better to bring more documents to the initial meeting, including those related to retirement provisions, tax authorities, etc. Also, make sure to allow enough time.
The woman’s upcoming civil servant status is definitely a big advantage. However, you will likely be asked about family planning, and you should have a well-considered and convincing answer ready. Just a tip. (We have had couples with a newborn where the woman freely shared that she plans to stay at home until the child starts secondary school... that is, of course, a deal breaker).
The woman’s upcoming civil servant status is definitely a big advantage. However, you will likely be asked about family planning, and you should have a well-considered and convincing answer ready. Just a tip. (We have had couples with a newborn where the woman freely shared that she plans to stay at home until the child starts secondary school... that is, of course, a deal breaker).
No, of course there were other expenses as well (car, vacation, etc.). The 10,000 euros are just from last year.
After taxes, about half is gone. The reserves for the company are in place, so they don’t need to be increased further. Currently, we pay around 700 EUR (about 740 USD) rent. However, I would prefer a longer term with smaller installments (around 700 EUR / month).
After taxes, about half is gone. The reserves for the company are in place, so they don’t need to be increased further. Currently, we pay around 700 EUR (about 740 USD) rent. However, I would prefer a longer term with smaller installments (around 700 EUR / month).
@Jean-Marc
Thanks for the tip. I was already aware of the documents from recent years. The figures are all good – active growth.
Children are actually not planned/to be expected. Therefore, this should not be a major issue. However, I really appreciate your insight from a different perspective!
Thanks for the tip. I was already aware of the documents from recent years. The figures are all good – active growth.
Children are actually not planned/to be expected. Therefore, this should not be a major issue. However, I really appreciate your insight from a different perspective!
We initially planned to buy a house but then decided to build one instead because, in this rural area of Hesse, only very old houses are for sale. These would require significant investment, or the new houses on the market are priced almost as high as a newly built home. Since land is still affordable here, we preferred to build a new house tailored to our needs.
Prefab houses, however, are not necessarily cheaper than solid construction.
By the way, I grew up in a mid-terrace house where, “to make matters worse,” the living/dining room faced north, and I don’t quite understand why so many people rule that out. I never found it problematic, and from a heating perspective, it even has some advantages.
Incidentally, we only contributed €21,000 (approximately $23,000) of own capital, and currently only my husband earns an income, and he has a fixed-term contract (teacher)… yet we still managed to get a good loan without any problems.
Prefab houses, however, are not necessarily cheaper than solid construction.
By the way, I grew up in a mid-terrace house where, “to make matters worse,” the living/dining room faced north, and I don’t quite understand why so many people rule that out. I never found it problematic, and from a heating perspective, it even has some advantages.
Incidentally, we only contributed €21,000 (approximately $23,000) of own capital, and currently only my husband earns an income, and he has a fixed-term contract (teacher)… yet we still managed to get a good loan without any problems.
M
Mottenhausen30 Dec 2018 14:38Your goal of a €700/month payment and €10,000 down payment honestly won’t get you very far. You also need to plan monthly savings for vacations and a new car, unless your car lasts the next 30 years and you stop going on holidays. But that actually doesn’t matter much, as the bank sets fixed amounts for these. And an annual income of €50,000 is not that high for a self-employed person, since the risk of loss of earnings is much greater compared to, for example, a civil servant.
H
HilfeHilfe30 Dec 2018 14:58Impossible with the available equity