Good evening everyone,
we registered in the forum today and are just starting our house building plans. We live in Bremen and want to build in the surrounding area.
Today, we had an appointment with an independent financial advisor who also financed my brother’s house and previously my parents’ house. I have just finished my studies, and we now have a total net income of about 3650 € (approximately $3850). We are both 29 years old – I completed vocational training and gained work experience before my studies.
I was mainly there because I am, of course, aware of the unusual interest rate situation and wanted to ask whether we should save to build equity or rather take advantage of the low interest rates. The answer was clear in this case: with 20,000 € (about $21,000) in equity, we can easily get a construction loan for 220,000 € (around $231,000). The interest rate situation is exceptionally favorable. The portion from the KfW loan would be 100,000 € (about $105,000). The effective interest rate for both loans combined would be 2.79%. The KfW loan would be repaid at 4.35%, and the bank loan (120,000 € / $126,000) initially only at 1%. The fixed-rate period is 10 years at first.
The monthly payment would be 958.31 € (approximately $1005).
This seems manageable monthly and exceptionally affordable to me.
Of course, the conversation was just for information, as all further steps (house type, construction company, land plot, etc.) still have to be reviewed and clarified to determine the actual financing needs.
My question is simply whether we actually received a good (non-binding) offer and whether you also think it makes sense in our situation to start building sooner rather than later, despite the low equity share?
Thank you very much.
we registered in the forum today and are just starting our house building plans. We live in Bremen and want to build in the surrounding area.
Today, we had an appointment with an independent financial advisor who also financed my brother’s house and previously my parents’ house. I have just finished my studies, and we now have a total net income of about 3650 € (approximately $3850). We are both 29 years old – I completed vocational training and gained work experience before my studies.
I was mainly there because I am, of course, aware of the unusual interest rate situation and wanted to ask whether we should save to build equity or rather take advantage of the low interest rates. The answer was clear in this case: with 20,000 € (about $21,000) in equity, we can easily get a construction loan for 220,000 € (around $231,000). The interest rate situation is exceptionally favorable. The portion from the KfW loan would be 100,000 € (about $105,000). The effective interest rate for both loans combined would be 2.79%. The KfW loan would be repaid at 4.35%, and the bank loan (120,000 € / $126,000) initially only at 1%. The fixed-rate period is 10 years at first.
The monthly payment would be 958.31 € (approximately $1005).
This seems manageable monthly and exceptionally affordable to me.
Of course, the conversation was just for information, as all further steps (house type, construction company, land plot, etc.) still have to be reviewed and clarified to determine the actual financing needs.
My question is simply whether we actually received a good (non-binding) offer and whether you also think it makes sense in our situation to start building sooner rather than later, despite the low equity share?
Thank you very much.
Der Da schrieb:
I don’t understand that. If I have a fixed interest rate for 20 years, it doesn’t matter at all where the interest goes afterwards.
If you think I should invest my money at 3.6%, you’d have to show me a bank that is safe enough and actually does that 🙂 All those banks advertising 4% savings accounts are far from reliable. Every extra repayment makes sense because it shifts the annual payments in favor of the principal repayment.If savings interest rates realistically rise above 3.6% again (no suspicious special offers for newcomers), I wouldn’t make extra repayments either but would prefer to invest the money in secure investments for flexibility. However, this only works up to the saver’s tax-free allowance; after that, a 26.375% tax rate including solidarity surcharge must be taken into account. After that point, the savings interest would have to rise to 5%, which is rather unlikely again.
Der Da schrieb:
This shows you that it is completely personal how people plan their financing. Our financing plan is based almost entirely on extra repayments. We have kept the monthly payment as low as possible to maintain maximum flexibility. We plan fixed extra repayments of 5–10% each year. After parental leave and possibly reduced working hours, we also plan to make more extra repayments.
That is why we will choose a monthly payment lower than currently necessary.
Der Da schrieb:
High interest rates at the end are quite possible. But what you don’t want to understand is that if you have a remaining balance under $30,000 at 9% interest, it hurts less than paying too much interest for 20 years,Correct.
I have said everything I wanted to say from my side.........
Just two more points: the term has been "Sparer-Pauschbetrag" for some time now, and for married couples it currently amounts to 1500 euros (without guarantee ;-) ).
You can make several additional repayments before taxes apply (for example, 30,000 euros at 5%).
And that is speculation again....
Just two more points: the term has been "Sparer-Pauschbetrag" for some time now, and for married couples it currently amounts to 1500 euros (without guarantee ;-) ).
You can make several additional repayments before taxes apply (for example, 30,000 euros at 5%).
Then the interest on credit balances would have to rise to 5%, which is rather unlikely.
And that is speculation again....
Well, the problem is your salary suffers too... inflation doesn't benefit you, only hyperinflation does—if your employer adjusts your salary accordingly 🙂
That actually helped some people with the Reichsmark in the early days back then.
But in the end, the bank gets what it wants, so don't get your hopes up—they are stronger than we are 🙂
That actually helped some people with the Reichsmark in the early days back then.
But in the end, the bank gets what it wants, so don't get your hopes up—they are stronger than we are 🙂
We would like to present our current final floor plan once again – feedback is very welcome.
Note: To make the bathroom a bit larger and the kitchen a little wider, we will move the staircase 25 cm (10 inches) to the "right."
The plot faces north – north is therefore where the man with the lawn mower is standing. The terrace is planned to wrap around the living and dining area.
Thank you.
Note: To make the bathroom a bit larger and the kitchen a little wider, we will move the staircase 25 cm (10 inches) to the "right."
The plot faces north – north is therefore where the man with the lawn mower is standing. The terrace is planned to wrap around the living and dining area.
Thank you.
I can’t really comment on the floor plans, but in the bottom right corner, your names, including the address, are visible... Do you really want to share this information publicly on the internet like this??? 😕 Unless these aren’t your real names but made-up ones, which I don’t think is the case, right?