2D·

Portfolio liquidation, house purchase. Recommendations ?!

Hello everyone,

My husband and I are about to buy a house. The new house is supposed to cost €750,000... plus costs such as the kitchen, floors, garden, utilities, etc., of course.

We have done some calculations and are thinking about using between €125,000 and €150,000 of our €225,000 capital so that we get a good interest rate and the monthly installment is not too high, as the construction will take 2 years (with demolition of the old house) and we are also paying rent.

However, we both have a good cash flow, around 10-11k net per month together.

What do you think? What should I sell and when? Get half of everything out quickly? Stop loss everywhere so that we don't take another crash with us? I think we'll have to pay the first installment in the fall, the purchase of the property and ancillary costs.

Maybe someone has some experience :)$AIR (+1,28 %)
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32 Comentarios

Ayecaramba@Ayecaramba256

Actually, it is not so clever to sell anything at the moment due to the weak us dollar

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GeldGenie@GeldGenie

@Ayecaramba256 The USD is not expected to recover in the medium term. I would therefore ignore this aspect.

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Hansetrader@Hansetradee

@GeldGenie ok. I don't have a choice. The money is just due in the fall

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Ayecaramba@Ayecaramba256

@GeldGenie Now I'm looking forward to the reasoning

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wealth_navigator_1794@wealth_navigator_1794

Watch out for the tariff increases in August. That will hurt your returns a bit if you want to go out in the fall

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Ayecaramba@Ayecaramba256

@wealth_navigator_1794 but interest rate cuts are also likely to come soon

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GeldGenie@GeldGenie

@Ayecaramba256 In the medium term, there is simply little to suggest a strong appreciation of the USD. Although the Fed is reluctant to cut interest rates, the market still expects the interest rate differential advantage over Europe to narrow. At the same time, debt and the budget deficit continue to rise in the US - this is putting pressure on confidence and, in the long term, on the dollar.

In addition, many countries are diversifying their currency reserves (keyword: de-dollarization), and China is also reducing US government bonds. For me, this means that the USD is structurally under pressure, even if it gains in the short term.

Sorry for the late reply 😅

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Epi@Epi

If the expected return on the deposit is higher than the interest saved on the loan on down payment, then perhaps it is not really worth selling part of the deposit? Deposits can also be pledged as collateral, at least partially. Perhaps that is enough to get better conditions?

Otherwise, get rid of the small items at a loss first. 👍

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Gehebeltes-EFH@Gehebeltes-EFH

@Epi Genau.

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Mister_ultra@Mister_ultra

21H

@Epi I subscribe to this, or rather this is how I proceeded.

I left the majority in the portfolio. In order to achieve the "minimum equity" for a good interest rate, I sold smaller positions in the portfolio that had been on the hit list for some time but were usually still held. As a result, some losing stocks from the corona hype phase were finally removed from the portfolio.

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Hansetrader@Hansetradee

20H

@Mister_ultra Yes, that's how I've proceeded so far. I have already liquidated 3 "smaller" positions. I'm not saving anything new until the first installment is due and then I'll see what else needs to be sold. I think I still have to liquidate at least 80k. Exactly, we have covered 20% of the purchase price. No more

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Maverick@Pete_Mitchell

Would take the opportunity to "tidy up" the portfolio. I think there are too many individual positions. Nobody can tell you whether you should sell now or wait. Even if you work with a 5% stop loss, for example, it would have been better to sell now if a correction comes.

Personally, I would start selling the smaller positions now.

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Michael@MichaG83

If you were to sell, make sure to liquidate the positions that are in the red first in order to fill the loss pot. This way you don't have to pay unnecessary taxes on the green positions.

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Hansetrader@Hansetradee

@MichaG83 That's right, especially at first! I might just do that now in case a stop order is triggered

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market_expert_gbtws@market_expert_gbtws

I also put 130k into the house back then. Deposit is still 3 years back to the level before I bought the house!

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Hansetrader@Hansetradee

@market_expert_gbtws How much was your deposit worth then? Because our savings rate will then only be 1k instead of 3k... I think that will take a while for us.

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market_expert_gbtws@market_expert_gbtws

My portfolio was then down from 140,000 k to 10k! But the 1.2% interest rate was more than worth it

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Hansetrader@Hansetradee

@market_expert_gbtws oh yes ok! They are at 3.2 :-/ but there's nothing you can do

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Gehebeltes-EFH@Gehebeltes-EFH

@market_expert_gbtws What would the interest have been like without the €130,000?

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Hodlinvestor@Hodlinvestor

Can you claim the loan costs against tax? If so, I wouldn't sell anything

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Hansetrader@Hansetradee

@Hodlinvestor have no independence

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Alfred E.@Papiertiger

Let the bank advisor work for you and calculate several combinations. Including the total costs for the terms. Yes, don't just insist on what the form gives you.

You have a target monthly installment.

KfW 40/20x check all with 10/15 years
Normal annuities with 10/15/20 years and also a combination of a large part with 15 years/ 50-100k only 10 years and a part 20 years.

Each variant then has different effective interest rates and then it depends on your risk appetite.

After 10 years, look again to see whether you can then take part of the deposit and continue to finance it more cheaply/new financing.

Otherwise be sure to check special arrangements and repayment changes. Each deletion of the options brings a little lower interest.

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Hansetrader@Hansetradee

@Papiertiger hey, yes, we've actually already gone through everything and roughly found the best solution for us. But we should/wanted to put in 20% equity. 100% financing is too much of a monthly burden for us. The interest rate would also be higher

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Dividende > Zinsen@GoDividend

What interest rate are you currently getting for what term, if you don't mind me asking?

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Hansetrader@Hansetradee

@GoDividend We are now at 15 years at 3.2% plus 24 months interest-free contribution provision and 1.25 repayment. We will also add the KFW loan, as the new house will be KFW40

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Gehebeltes-EFH@Gehebeltes-EFH

@Hansetradee Are there still banks that pass through KfW? Ok

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Toni M.@INOT

The decision as to whether you should pay off a home loan more quickly or invest in other assets instead depends on various factors and is an individual decision. Generally speaking, if the interest on the loan is higher than the return on the investment, it often makes more sense to pay off the loan more quickly to save on interest costs. If loan interest rates are low, investing in other forms of investment can be more lucrative, as you can potentially achieve higher returns here

Arguments for faster repayment:
Interest savings:
An unscheduled repayment or a higher repayment rate reduces interest payments, which can lead to significant savings in the long term.
Reduction in residual debt:
A higher repayment rate shortens the term of the loan and reduces the residual debt, leading to faster debt reduction.
Security:
Faster repayment reduces financial risk as there is less debt and less interest to pay.
Reduced dependency:
By paying off the loan, you become less dependent on the bank and more flexible in making financial decisions.

Arguments for investing:
Potential higher returns:
With good investment conditions, investments can generate higher returns than the interest on the home loan.
Wealth accumulation:
Investments can lead to long-term wealth accumulation and improve your financial situation.
Liquidity:
Investments can be flexibly sold and converted into cash if required.
Factors to consider when making a decision:
Level of loan interest rates:
If loan interest rates are high, a quick repayment often makes more sense.
Return on investment:
If the potential returns on the investment are higher than the interest on the loan, an investment may be considered.
Personal risk appetite:
Those who are risk averse will be more inclined to repay, while those who are willing to take risks are more likely to invest.
Liquidity needs:
If money is needed in the short term, investing may make more sense than paying off the loan.
Tax aspects:
It is advisable to find out about the possible tax implications of repayments and investments.
Conclusion:
It is not possible to make a blanket recommendation as to whether it is better to repay or invest. The decision depends on individual circumstances and preferences. A thorough analysis of your own financial situation, loan interest rates and potential investment returns is essential. It may also be advisable to seek advice from an independent financial advisor.

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Gehebeltes-EFH@Gehebeltes-EFH

@INOT Which AI was it?

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Toni M.@INOT

13H

@Gehebeltes-EFH The first thing I googled was

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Investomesto@Investomesto

Is it not possible to deposit the portfolio as collateral with the bank to get a lower interest rate?

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Hansetrader@Hansetradee

@Investomesto hey, but that is already included, so to speak. Without this, the interest rate would currently be even higher. But we also want to put in some equity so that the monthly installment isn't so high

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Investomesto@Investomesto

All right, understandable. Unfortunately, I don't know that much about this topic, I just wanted to ask this fact. I wish you all the best ☺️

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