The best age for buying real estate?

In recent years, the specifications for home loans have changed again and again. On the one hand, to protect borrowers to get a safe construction financing without too much risk. On the other hand, from the perspective of banks that currently want to hedge against rising interest rates.The residential real estate guideline (WIKR for short), introduced in 2016, gives clear guidance to banks on what requirements prospective borrowers should meet to be eligible for a real estate loan. In addition, it prescribes a documentation obligation of the consulting discussions, so that the borrower has reliable discussion protocols in case of dispute. Thus one wants to protect borrowers better against wrong or insufficient bank advice. Thus banks were taken more into the obligation – and thus also into the adhesion – taken. An important criterion is the age for the real estate purchase.

As a result, many prospective home buyers now find it harder to get a loan. An important cornerstone: the loan must be fully repaid before retirement.. That is why age is more decisive for buying real estate today than it was in the past. A prospective borrower and normal earner in his early 50s has more hurdles to overcome today to obtain construction financing if he is financially unable to fully repay the real estate loan by retirement age.

Decisive is not only the age for real estate financing, but also the available equity capital

Often, depending on age, the available equity is actually a significant factor. If one is 50, but has 50 or even 60 percent own funds for the real estate purchase, one will rarely get a problem. Especially if you can fully repay the mortgage in the course of 15 to 18 years. In contrast, young families who can still work for 30 or more years are more likely to have problems finding a financing bank if they have little or no equity capital. Because banks appear then the risks of a credit default because of the long-term credit financing larger – z. B. Due to divorce, job loss or other economic crises. Therefore banks will behave with the granting of credit also substantially more cautiously than with older, but solvent building loan prospective customers.

An unwritten law says that one ca. 20 percent equity capital in the real estate purchase should bring, in order to receive more or less problem-free a construction financing. However, this equity ratio varies from bank to bank. Therefore, the advice of a bank-independent financial advisor is always advisable. Particularly if this has daily access to as many as possible bank offers to the baufinanzierungin germany. The market leaders among construction financing intermediaries (z. B. Accedo, dr. Klein, interhyp) currently have real-time access to daily updated mortgage offers from over 400 banks.

What age for buying real estate is the best?

From which age an own real estate is worthwhile, is naturally always also dependent on the financial situation, in which the individual finds itself. In principle one can say however already: the younger the better. But in the end it always depends on the right planning when one can move into one's own four walls. Important in this context, however, is always the amount of equity available, which one can bring in the construction financing. It should be borne in mind that the incidental costs of purchase (z. B. Real estate transfer tax, broker, notary, etc.) are not part of this equity ratio but have to be paid additionally with own funds.

As a rule, real estate buyers are between 35 and 50 years old. The current average age at the first purchase of a property – new construction, condominium or house from the stock – is currently approx. 39 years. Do you really have to wait so long? Not necessarily: those who finance young have longer to finance, can better adjust interest and repayment during the financing period to future life events, and can also live in their property much longer and thus also make better provisions for the future.

A young age for buying real estate has many advantages. But only if you have a precise financial plan, negotiate a flexible construction financing contract that offers maximum flexibility in rate, interest and repayment adjustments during the term and also provides maximum unscheduled repayment options – without incurring additional costs in the form of higher interest rates. For this reason alone, a lot of research must be done in advance and comprehensive construction financing knowledge built up. Of course, advice from a bank-independent source makes sense. But it is just as important to take a realistic look at your own financial situation and make a serious assessment of how your income situation will develop in the future.

Build up equity early – no matter what age is chosen for the real estate purchase.

So if you want to buy a property at a young age, you should prepare yourself particularly well. And about saved money or. Have appropriate liquid funds, recommends the consumer center. So-called zero-percent financing (construction financing with no equity at all) is generally not advisable. Especially since in this case very high interest rates are charged. There are very few exceptional cases that make zero percent financing possible: z. B. Young people in higher civil service or very wealthy people. As a rule of thumb, an equity capital of approx. 20 percent of the purchase price.

Max herbst, a recognized construction financing expert with decades of experience, believes saving in stocks is a good way to go. In his view, one option for young consumers can be exchange-traded funds (etfs). "There I have almost no fees and remain flexible," explains the financial expert. In this way, equity can be built up with a little foresight. Etfs are funds that track a stock index and are thus linked to its performance. Since prices on the stock markets fluctuate, etfs are particularly interesting for the longer term. Because the more time investors have, the lower the risk of loss. According to the german stock institute (DAI). A broadly diversified portfolio of shares in the dax index yielded an average annual return of 8.9 percent over 20 years.

And if you save now, you can invest your savings at a favorable time. That's why the best age for real estate financing is the earlier the better. This is also true when starting your own targeted savings plan. The ETF action mentioned by experts autumn are thereby only one of many possible ways – main thing one begins as early as possible with the saving for the planned real estate property.

When is the best time to enter?

In these times of rising property prices and expensive rents, many are wondering: when should I get into property search? One thing is certain: anyone who builds or buys must think long-term. In the case of particularly low interest rates, long-term fixed interest rates of at least ten, and preferably 15 or 20 years should be chosen. In the current situation of rising interest rates, it is not easy to decide between a shorter or longer fixed-interest period. Also for this an intensive consulting discussion with versierte baufinanzierungsexperten can bring clarity. Especially since other factors besides the interest rate also play an important role: is an inheritance to be expected? If the revenue situation can be made particularly positive in the next 10 years? Or are there subsidies that are included in the equity ratio on the part of the bank?

Also important: the closer to one's own load limit the financing is, the longer the fixed interest rate should be agreed upon. Long-term construction financing contracts cost slightly higher interest rates though. But the borrower then has the security that these currently still low interest rates do not change during the contract period. The average interest rate for real estate loans with a term of 10 years is currently approx. 2.5 percent. 3 percent is currently demanded for a 20-year fixed interest rate.

No matter which age is selected for the real estate purchase – the proverb applies: "examine who binds himself for a long time".

Especially young prospective customers with little savings should count on a buffer to prevent failure. The loan installment must be bearable even if the income decreases. That means, never calculate with the absolute load upper limit and/or. Finance. To find suitable financing, it is important to obtain offers from several banks – this should also include offers from bank-independent construction financing brokers such as ACCEDO AG. The effective annual interest rate serves as a comparative figure. However, in order for this figure to be meaningful and comparable, the terms or. Interest rate lock-in periods, initial repayment and agreed unscheduled repayment options of the offers of different banks and intermediaries should be comparable. And it's also important to take an examining look at the residual debt reported therein. The residual debt provides information on the amount to be refinanced with a follow-up loan after the fixed-interest period has expired. One thing is clear: the lower the residual debt at the end of the term, the better.

In summary, it is best to start planning the purchase of real estate as early as possible. You should first take care of the equity. Because the more that's available, the less risky – and therefore less expensive – real estate financing turns out to be. It's also important to gain appropriate knowledge around construction financing. This includes funding opportunities via low-interest loans as well as grants (z. B. For energy-efficient construction or. Renovate). If one is then so far prepared, one can start the consultation with a bank-independent construction financing mediator. These consultations are always free of charge with reputable brokers such as ACCEDO AG – even if the result is not to buy or build a property for the time being.

Property for old-age provision

Improving quality of life and retirement planning are the top motivating reasons to finance real estate.