Buy a rental apartment or real estate? Which is still worth it in 2021
The reason for this is, on the one hand, the currently still extremely low building interest rates. On the other hand, there is a whole range of state and church funds that make buying real estate even cheaper.
To receive non-refundable grants, either an apartment for personal use or a house for the family can be purchased. The state contributes with the highest possible grants if your own children live in the household or if the new apartment is furnished in such a way that it remains livable for a long time even in old age.
The KfW Baukindergeld will no longer be available in this form from 2021, but the Kreditbank für Wiederaufbau has plenty of subsidies and discounts available if an energy-saving house is built. These houses are referred to as “eco-house”, “zero-energy house” or, for example, “passive house”.
Where can I get state subsidies for buying a house or apartment?
Basically, a distinction must be made between concessions on construction loans and state subsidies that do not have to be repaid. Everyone in the household is given a certain amount of cash to build a house. Here is a complete selection of current KfW funding programs for real estate purchases. Especially in the field of e-mobility, KfW has many other exciting funding programs available, which can be combined with the purchase of a new apartment or house. Practical if the zero-energy house not only produces more electricity than it needs, but also if the environmentally friendly e-vehicle can be charged directly on your own property with green electricity.
Concessions are advantages in the modalities of loan repayment. In this way, church congregations can give building money to families for whom the interest burden can be fixed for many years at the current low interest rate. Anyone who takes care of their family, i.e. their relatives in need of care or their own children, usually receives further discounts when buying real estate. So it’s worth not only contacting your house bank about a building loan, but also asking social organizations about regional options or seeking advice directly from the responsible parish.
Who gets a real estate loan?
It is sometimes not that easy to buy a new apartment or house or to convert it in a natural way with a loan. Incidentally, subsidies and subsidies are not only available for the purchase of new real estate, but also for a handicapped-friendly, barrier-free conversion of house and apartment. It is important to make a good impression at the bank. Think of your loan interview as a job interview in which you have to score points and convince your bank advisor that you will be able to pay back all monthly installments on time and reliably over the entire agreed loan term. Of course, this includes a flawless visual appearance as well as complete documentation. In addition, you should already have gone through various modalities of the future real estate loan at home and selected a suitable variant for your individual situation. When buying a property, it is important to be able to cover at least the ancillary purchase costs with your own financial resources. If this is not the case, 100 percent financing is often rejected by most large banks.
Underestimated additional costs when buying a house: This is how much a notary, appraiser and interest cost
It is not possible to say in general terms how high the ancillary construction costs are in individual cases. The location of the new property is important. Real estate in a good to upscale location can cause higher brokerage costs, which drives up the additional purchase costs, as Maxi Schwarz from the wohnung-jetzt.de portal has observed. For a notary or the entry in the land register, however, there are regionally uniform fees. The creation of the necessary documents, which often have to be certified in triplicate, causes additional additional costs. A key factor, however, is the interest over the agreed term of the real estate loan. In the case of a repayment agreement without a fixed interest rate, it can happen that the construction interest suddenly increases after a short time. If interest is locked in for a period of 20 years or more, however, the interest rate will be higher. As a rule of thumb, the real estate loan should be negotiated in such a way that it can be repaid in the shortest possible time.
How long does it take to pay off the house or apartment?
In order to be able to get the real estate loan at all, some cuts and restrictions are necessary in many households. For example, the second car can be sold, which on the one hand immediately provides more equity, but on the other hand also reduces the monthly burden if taxes, insurance and fuel bills are eliminated in the future. It can have a positive effect on lending if the bank advisor is given specific considerations and concrete implementations in this regard. In this way you underline that you prioritize credit financing and are ready to minimize unnecessary special expenses.
If the real estate loan expires soon, it can make sense to transfer the remaining debt to another bank. The new bank pays the outstanding amount all at once, and the monthly installments are then repaid to the new bank on new terms. There are often benefits in the monthly interest, which can make the overall repayment easier. Follow-up financing is worthwhile in 2021 for property owners who took out a building loan about 10 years ago and now want to benefit from the low interest rate for building projects. A real estate loan can be concluded for 10, 15 or 20 years. In individual cases, a credit term of up to 30 years is agreed. In any case, it remains to calculate how the additional costs will develop with such a long repayment period and what the dream property will ultimately cost more as a result.
Conclusion: Buying an apartment or house will be more worthwhile than ever in 2021!
Anyone who is still benefiting from the low building interest rates and buying their own home usually does not need more than around 20% of all real estate costs in equity. With some credit institutions in some economic regions it is only around 13% equity, while other banks can demand 25% equity plus the self-financing of the ancillary construction costs. A supposedly cheap real estate loan can quickly turn into a cost trap if the currently low interest rates cannot be locked in for the entire repayment period.