Aspects such as the number of external walls or the building fabric used influence heating costs
Aspects such as the number of external walls or the building fabric used influence heating costs
Customers should always ask for the total effective interest rate, because in addition to interest it also includes contributions and fees for the building society loan agreement.
If you plan to build a house in the future, you can reserve building money in advance now to get a loan with attractive interest rates. Since very few people can afford a house without a loan, this form is a possible alternative to home savings. But what is behind this method of loan?
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Construction money in advance: reserve loan for follow-up financing
One offer for future home builders is, for example, the so-called forward loan, with which you can reserve the loan and the conditions years before the start of construction. You benefit from this above all if interest rates rise and you still get the reserved interest rate. Even if you already have a loan and it is foreseeable that you will need more money afterwards, the forward loan is a good way to reserve loan amounts in advance at attractive interest rates. With many types of loan, it is also possible that you have the opportunity to terminate the loan agreement at certain intervals. So if you have an old loan at low interest rates, it pays to sign a new loan agreement with better interest rates. An independent financial advisor can also show you what options are available.
Construction money in advance: secure loans with low interest rates
You can reserve a forward loan up to five years in advance. All you have to do is sign a corresponding contract in which the conditions of the loan are precisely recorded. As soon as the time has expired, the old loan agreement changes over to the new, lower-interest agreement. You have to reckon with around 0.01 percent additional costs per month that you reserve the loan for yourself.
Mathias Breitkopf, an expert in the field of real estate financing, knows that comprehensive advice is essential. Now he answers exclusively the questions of the t-online.de readers.
Many Germans have their own home at the top of their wish lists. Although real estate prices have risen sharply recently, mortgage lending is still cheap due to historically low interest rates.
Your questions about mortgage lending
For those willing to buy and build, many questions arise at the same time: Is the income sufficient for the desired property? How much equity is necessary? And how does the state promote the dream of one’s own home?
Readers’ appeal: Are those questions that are burning on your nails? Or what would you like to know? Send us your questions by email to firstname.lastname@example.org or send them to us using the contact form.
We will forward this to the home finance specialist Mathias Breitkopf. He has been working for Interhyp, a broker for private construction financing, for many years and knows firsthand the wishes and concerns of those willing to buy and build.
Preview: In September we will present your questions and the answers here on t-online.de. Be curious.
What follow-up costs arise after building the house?123helpme.me If you, too, want to realize your dream of owning your own home, there are a number of cost-intensive variables that you should not underestimate.
The follow-up costs after building the house: The property tax
The property tax, for example, can be found among the resulting follow-up costs after the house is built. The unit value of the house determined by the responsible tax office is multiplied by a per mill rate determined for tax purposes. The latter is known as the tax index. The resulting base tax amount is then taken by the municipality with the assessment rate, a percentage diversifier. This multiplication ultimately results in the property tax, which is determined individually by cities and municipalities depending on the location and region. As a result, the margin with regard to the property tax to be paid for an apartment in Germany ranges from 400 to 1000 euros, depending on the region.
Garbage disposal and street cleaning
You should also pay attention to the wastewater costs incurred after the house is built. These are calculated in cubic meters and vary depending on the spatial location. Another aspect to be mentioned with regard to possible follow-up costs is waste disposal. Some municipalities calculate the contribution to be paid based on the size of the bin and the period of emptying. It is also worth checking before building a house whether street cleaning fees have to be paid in the desired place of residence.
Consumption of fresh water, electricity and heating costs incurred
Further follow-up costs that arise after a house is built include the contributions to be paid for drinking water, electricity and heating. The fresh water consumption is calculated from the cubic meter price and an individual basic fee depending on the municipality. It is also worthwhile to calculate the electricity costs incurred in advance. These depend on the respective energy provider and, according to the Federal Association of Energy and Water Management, amount to 73 euros per month for a three-person model household. Aspects such as the number of external walls or the building fabric used influence heating costs. If you have strategically sensible ventilation and the property has good insulation, you can reduce your costs here.
Follow-up costs for insurance
Household contents and residential building insurance are part of the additional follow-up costs after the house has been built. In this case, the prices are calculated depending on the type of house, the location, the insurance provider and the insurance offers. With a monthly reserve you can create a financial buffer for future renovations. In this context, one percent of the house value per year is a common guideline.
Whether refinancing or follow-up loan: The interest rate differences between the cheapest and the most expensive provider are enormous. In its April issue, the magazine Finanztest examined the offers from 92 credit institutions and brokers and determined the cheapest loans for six model cases. The result makes one thing clear. When looking for a cheap home loan, care pays off.
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Cheap loans now only cost three percent interest per year, even with terms over 20 years. The differences are big: for a EUR 150,000 loan with a fixed interest rate of 20 years, you pay almost EUR 40,000 more with the most expensive provider than with the cheapest.
Building finance with building interest from three percent
The top offers come from building societies: the cheapest grant loans with Riester subsidies at effective rates of 3.0 to 3.6 percent – with fixed interest rates and installments over the entire term of 18 to 30 years.
Favorable follow-up loans with ongoing mortgage lending
For homeowners, the slump in interest rates offers the opportunity to get rid of their debts a few years earlier than expected. Follow-up loans, which the borrower repays in full within ten years, are particularly cheap. There was such a loan with the front runners in the test from an effective interest rate of 2.5 percent.
If you don’t need your follow-up loan for a few years, you can protect yourself against rising interest rates with the help of a forward loan. This means that the terms for the future loan can be agreed with the bank today.
Planning a home places high arithmetic skills on the builder. A large number of costs must be taken into account. Property tax is one of the cost items that is often overlooked.
House building: Property tax is assessed individually
When building a house, property tax is also due in addition to the costs for land and construction. This should be taken into account in the financial planning. Although building owners do not have to pay the current rent for a rented apartment, there are other financial burdens. You can only pursue a solid financing plan for building a house without falling into debt in the long term if you include all the costs incurred in the financing calculation.
The real estate tax is regulated by the real estate tax law. Property tax A is levied on agricultural and forestry properties, property tax B applies to all other properties. The unit value forms the basis of the calculation and, like the tax base calculated from it, is determined by the regional tax office.
The municipality is responsible for determining the percentage at which the tax is then to be levied. The percentage, which is also called the assessment rate, applies uniformly to the municipality and is estimated by it for a specified period of time, usually for at least one calendar year. The amount of property tax is therefore different from place to place and also depends on the size of the property. The client should therefore find out exactly what tax assessment he can expect on site.
Find out about property tax
The individual property tax to be expected can be obtained either from the municipality or the responsible tax office. In general, however, you can assume that property tax will grow based on the number of inhabitants in a city.
If you apply for a building society loan, you can save a lot of interest. Compare the various providers on the Internet, because there are many different conditions in terms of minimum savings time and interest rates.
Construction financing options
Mortgage lending can take the form of a simple loan, a loan or a building society loan agreement. In the latter variant, an amount is saved first, which is then paid out together with a building society loan and covers the costs for the construction financing. It should be noted that a building society loan is not paid out for free use: You have to prove that you will use the money to build, convert or purchase a home or to renovate or purchase new furniture.
Save interest with a building society loan
With a building society loan, you can save a considerable amount of interest. This is because you have already saved money for some time through the building society loan agreement. In doing so, you forego high interest rates, and in return the building society agrees to offer you a building society loan on particularly favorable terms. Especially when you compare this form of mortgage lending with a conventional loan, you can see the significantly lower interest rates on repayment.
Building without equity capital – daring, but possible Low interest rates for the entire term of the financing: an interest rate fixation of 30 years
The amount at which the building society loan is paid out is contractually fixed in advance. It amounts to the difference between the contractually agreed Bauspar sum and the amount saved up to the allocation date. The modalities during the savings and repayment phases are also agreed in advance. Inquire, for example, what about the possibility of special payments in order to shorten the building society savings phase. In addition, always take into account that the building society will insist on residual debt insurance.
Owning a home is a great option for retirement planning. For the realization you need cheap building money if you don’t have enough equity. However, not only do the interest rates vary from bank to bank, but also other contractual conditions. To get cheap building money, it’s worth making a comparison.
Cheap building money also depends on the interest
Future builders still usually choose their house bank for a home construction loan. However, this is not always the cheapest loan. There are several criteria you need to consider when applying for building allowance. The interest is decisive – not the monthly interest, but also the effective annual interest. If this is low, it is usually a cheap loan.
Another point is flexibility. You should avoid banks that offer a flexible interest rate for building money. Because even if interest rates are cheap, they can soar at any time. This makes the loan more expensive than expected, and often the payments can no longer be made at some point. Then there is a risk of over-indebtedness and sometimes even the loss of the house.
How to find cheap building money
Get loan quotes from multiple banks and compare them. Either go from bank to bank in person or use the Internet as a source of information. There are numerous comparison calculators that can filter out cheap building money. To do this, you provide some personal information, such as existing equity, age of the borrower, occupation and earnings. Terms are taken into account as well as desired monthly repayment installments. In the comparison calculator you will now be shown the cheapest offers first.
Building without equity capital – daring, but possible. Low interest rates for the entire term of the financing: an interest rate fixation of 30 years
Such a source of information on the Internet can use the data entered to calculate models that are tailored to the respective borrower.