1Yr·

Hello everyone,

The following questions are burning under my fingernails:

My wife and I are seriously considering looking for a suitable small home of our own after all. We are both 45 and have our first viewing next week.

Should we sell the shares we need now that our ETF has done well, regardless of whether the house purchase actually works out? Or would it be better to wait until things get serious before selling and possibly accept a weaker (or even better) performance?

In the case of this particular house, 30% equity of the value and the ancillary purchase costs must be included. That's around 93k and would be our entire savings and retirement provision.

I find it difficult to liquidate everything for this. My wife is more relaxed about it, because there are still inheritances to come in a few years' time. But of course we hope that this will take 20+ years.

In addition, we both work and have a net household income of around 5.5 k, and rising. This means that we should have paid off the loan for the house relatively quickly (10-15 years) and we will still have the opportunity to save in an ETF again.

What are your thoughts on our situation?

Many thanks for sharing your thoughts!

17 Comments

GeldGenie@GeldGenie

1Yr

In principle, the ideal case would also be to exit or raise liquidity via DCA.

Personally, I'm not a fan of pension provision... But since CH & DE have different systems, someone else will be able to help you more.

Regarding the house question: won't a smaller/other one do?

Just because you can afford a 1 million house doesn't mean you need a 1 million house...

1. list with need/want/nice to have/don't want
2. look at the market

And not we have X, can afford Y maximum and then only look at the limit and above. 👍

Regarding credit and foresight. Credit in this case is not bad and I would leave it at that. 100k today is more than 100k in 20 years. And if the real estate interest rate is 3.5%, you should get more than 3.5% a year on the market (over 20 years). 😊

Hope that helps - my 2 cents.

GG

•

B.T.@Benson78

1Yr

@GeldGenie Thank you for your input. We have set ourselves a limit of 2k per month. We are not prepared to spend more. Accordingly, we end up with about 250k for the house. More would of course be possible, but we don't want to do it. If it works out well, if not then it's no big deal.

Can you briefly explain the exit via DCA? Unfortunately, I don't know the term.

••

GeldGenie@GeldGenie

1Yr

@Benson78

But do you need a house with a 2k monthly payment? Or would a smaller one also lead to satisfaction? That's what I meant 😊

DCA - Dollar Cost Averaging.

If you want to make a purchase over 120k in 1 year, you can minimize risks by getting out of the market 12x 10k, i.e. monthly. Of course, you will miss out on possible price potential, but you will also no longer be exposed to the risks.

My reasoning: If you wait until the end and the market collapses (for whatever reason....), the dream of home ownership will burst.

At the end of the day, you have to assess the risks and opportunities yourself. 😊

•

B.T.@Benson78

1Yr

Great, thank you very much 🙏

•

Kevin E.@KevinE

1Yr

First of all, I would ask myself the question: does it really "have" to be a house - and if so, wouldn't it perhaps be possible to rent one?

There is no right or wrong in this respect. Just remember, as the owner, issues such as broken heating, a new roof, etc. are all up to you (keyword: take into account maintenance reserves appropriate to the age of the house). In addition, you often spend more money on things like the garden, etc. than planned. I'm currently seeing this more and more with friends.
Furthermore: what happens if - for whatever unlikely reason - there is no inheritance? Long-term care in a nursing home (e.g.) is not cheap or the parents want to "live" a little longer and simply spend more money than expected. Since only you know the sums, you'll have to judge for yourself. Otherwise: if you have liquid assets, perhaps a cheaper personal loan from your (in-laws) parents would be an option? In this generation, money often lies around without interest anyway. Maybe you can get a (written) personal loan at 2% interest. That would save you a lot of money.

Why I'm going into so much detail: I'm bothered by the fact that your entire retirement provision will be gone. In the worst-case scenario, you would have a paid-off house in your early 60s, but only the SPS as a retirement provision. If you're lucky, you'll be able to keep the house, but you probably won't be able to "enjoy your retirement" if that means traveling regularly, going out to eat, etc.

•

B.T.@Benson78

1Yr

@KevinC Thank you for your comment. I posted my question here for food for thought. I hadn't even thought about a missing inheritance due to care. Thank you very much for that!
The private loan is actually a way of not blowing everything on your head. I'm not a fan of that either.
So thank you once again. I'll gladly take your points into consideration when making my decision!

•

Kevin E.@KevinE

1Yr

@Benson78 That's how the community should work if possible!

•

Dividendensammler@DividendensammIer

1Yr

Apart from that, yes or no home ownership.

Pledging part of the deposit as an equity share is also a Möglichkeit👍🏻 I also use it for real estate transactions. If you don't plan to sell the deposit, this can also increase your equity

•

B.T.@Benson78

1Yr

@DividendensammIer strong, that would of course be best. Many thanks for the tip!

•

Dividendensammler@DividendensammIer

1Yr

@Benson78 is usually credited at 50-65%. 100k deposit as 50-65k equity. Of course, you don't have to sell it, it's just collateral for the bank.

•

SGP@Koenigmidas

1Yr

Depending on the bank, you can also transfer your shares as equity. Because you have to pay tax on your profit when you sell them. However, depending on the bank, if you transfer it incorrectly, the shares will be sold and you will have to pay tax on the profit as normal (this happened to me).

•

Peter@Pe_eT

1Yr

The question arises as to whether 30% equity (70% condis) must necessarily be brought in. What would the interest be with 80% or 85% condis? If the interest rate difference is not so high, I would not contribute my full equity. With some banks / construction financing, you can change the repayment rate during the fixed-interest period or make special repayments if you have some money left over to reduce the repayment period.

••

B.T.@Benson78

1Yr

@Pe_eT Hi Peter, I'm right there with you! A maximum of 70% of the house can be financed.

••

Alfred E.@Papiertiger

1Yr

So purely based on the posts, I would go through all the options. 1) Rent a house. 2) Buy/rent a larger apartment etc. As soon as the child is out of the house, you generally don't need that much space anymore and all the "janitor" activities are not without them either. As soon as the house is paid off, the big investments usually come (heating, windows, roof). In many locations, buying a house is not an investment but a luxury that you want to afford. ( I live in a rented house myself :-) )

--

••

B.T.@Benson78

1Yr

@Papiertiger absolutely. Those are the two options! And it's simply luxury, I agree with you.

••

Alfred E.@Papiertiger

1Yr

@Benson78 so if you have 250-300k in your pocket and want to buy, general tips:

1) Have an appraiser come! The few hundred euros are extremely well invested, no matter what friends/family say

2) Get creative with the loan:
KFW 124 / Baukindergeld and whatever other subsidies are currently available (changes all the time), check them yourself and include them if necessary. Of course, observe the conditions if you want to rent/sell. With kfw, the banks hardly earn anything as it is only passed through.

Have different terms, special repayments and repayment change options calculated. Each flexibility costs 0.xx interest = several thousand to 10 thousand euros in costs.

So e.g. select a 10/15/20 year combination + 10 years KFW. It will be super complicated to calculate, but you can then also invest money more flexibly in the ETF. And if the bank salesman doesn't feel like doing the math, he'll get a lot of money from you.

••

B.T.@Benson78

1Yr

@Papiertiger great tips.many thanks 🙏

••