Buying a house the most important points

Buying a house is a dream of many tenants and, given the current low building interest rates, it is feasible for most - provided that the buying process is well thought out and well prepared, as there are numerous aspects to consider. A central point: mortgage lending. It is important to make solid calculations.

But topics such as the quality of the construction, the location of the property, and individual needs are also important. There are also questions about the process of buying a house: Does a preliminary contract make sense when buying a house? What distinguishes the purchase of privately buying a home through a real estate agent?

Buying a house - which house should it be?

How do we want to live? A charming old building or would you prefer a new one? Which house types come into question: classic solid house, wooden house, or prefabricated house? Would an existing house that needs to be renovated to meet the needs also be suitable? These questions cannot be asked everywhere by prospective homebuyers.

The options are mainly there where the real estate market offers a wide range. However, especially in very popular locations, interested parties have to be prepared to compromise on their ideas - and could. However, this does not have to mean that the living comfort is worse. Because depending on the condition, houses that are not quite suitable can initially be adapted to the needs utilizing renovation - for example by changing the floor plan. The energetic standard can also be improved. Special attention should be paid to these when buying a house. Here the energy certificate, which the seller must present without being asked, provides important information (the energy certificate is mandatory). You can find more information about this on our Energy Pass Values page. For getting apartments for rent in Dubai visit Stellar Homes.

How much house can I afford?

The dream of owning your own house can only be relaxed if the home financing is properly tailored to your income situation. This assumes that you choose the loan amount in such a way that there is still some leeway for the cost of living - and that temporary loss of income is also not a major problem. After all, the new house also wants to be furnished and the garden laid out. If you don't have any money left for it, the house will be more of a burden. The financing banks take these aspects into account and generally do not finance "over budget". Nevertheless, it is worthwhile to have a good overview of your finances.

For a solid home loan, it is first important that you determine your financial flexibility and the available equity. You can find out how much you have available monthly for the loan installments with our household calculator. In the next step, the budget calculator can be used to determine the possible loan amount. This amount plus equity gives the maximum possible leeway for buying a house. If there are only a few houses for sale in your region, it is worthwhile to determine a theoretical financing amount before the viewing. Who knows up to what purchase price he has a good chance of getting a financing commitment is usually one step ahead of other interested parties.

Buying a house - which financing concept suits you?

The “house purchase” project stands or falls with the financing. You should plan the real estate loan accordingly carefully. Not only do you have to consider the monthly charge that matches your financial needs, but you should also ask yourself other questions.

As a rule, you have to decide on a certain fixed interest rate when you want to conclude a loan agreement. There are also construction loans with variable interest rates, but fixed interest rates are usually ten years. Fixed interest rates over five years or a significantly longer period are also possible.

For example, if you have life insurance, a bullet loan can also be considered, where the repayment is not made monthly, but in one fell swoop. 

Use the finance calculator for buying a house

After you have defined the financial framework and know how you want to set up the financing, it is important to tie down the specific financing. Since the borrowing interest for the required loan amount depends on your creditworthiness and also on the house that you want to buy, you should first obtain at least one financing offer.

Calculate notary fees when buying a house

Buying a house is a transaction with far-reaching consequences. Therefore, a notary is required to draw up and notarize the sales contract. He also accompanies the transfer of ownership with the Land Registry by the registration of the mortgage causes for real estate loans and the change in ownership. Depending on what is regulated in the sales contract, he also processes the payment of the purchase price via a notary's trust account or arranges for the deletion of entered charges such as a right of the agreed compensation payment.

Can you buy a house without equity?

Are you planning to buy a house and have not saved any equity? Then so-called full financing comes into consideration for you, which is however not offered by all banks. In the case of mortgage lending without equity, credit institutions take on a higher risk due to the higher loan amount, which can be remunerated with a borrowing interest that is higher than with a classic mortgage with around 25 to 30 percent equity. Buying a house without equity is easier for civil servants than for white-collar workers, as they have a more reliable income. Even those who earn very well should have a good chance of receiving a funding commitment. By the way: The term “house purchase without equity” is not used uniformly and does not automatically include the financing of the ancillary purchase costs. If 100 percent financing is mentioned, these costs must be paid by other means.

Checklist for buying a house

When buying a house, numerous aspects must be kept in mind. To ensure that no important questions are neglected, checklists that contain all the essential points on various topics are helpful.

 

Our “House purchase checklist" will help you to pay attention to the most important points about the house and its condition.

The preliminary contract when buying a house

It is not easy to find a house on good terms, especially in sought-after locations. If you want to make sure that the property is not sold to another interested party, you can consider a preliminary contract when buying the house, which, like the purchase contract itself, requires notarial certification. It means that the buyer and seller undertake to conclude the actual sales contract later. The seller thus has the security that the buyer will not change his mind again, and the buyer no longer has to fear that the property will be sold to another interested party. This so-called obligation to contract offers both contractual partners the security that the purchase contract will be concluded.

The preliminary contract regulates the most important agreements between buyer and seller, including the time by which the main contract is to be concluded. If it is not signed by one of the contracting parties within this period, the other can request the conclusion of the contract by filing a lawsuit. The only exception: is if the basis of the transaction changes significantly, the conclusion can no longer be claimed through legal action. This is the case, for example, if the house is badly damaged by a storm or the buyer can no longer secure the financing due to an accident.

Important:

Incidentally, the preliminary contract should not be confused with a reservation agreement. This is not made between buyer and seller, but between buyer and broker. It only contains the agreement that the real estate agent will not offer the property to any other interested party. For this purpose, the buyer usually has to pay a reservation fee to the broker, which is offset against the broker's commission when purchasing the property later. Otherwise, the broker will keep the fee.

Buying a house from private

This would also mean that there would be no support from the broker, who would, for example, advise on the search for a notary to certify the purchase contract, request all the necessary documents for the house sale from the owner, and also be able to better assess whether the required purchase price is correct.