Financial cushion for homeowner

Dusseldorf – builders and buyers have already compared numerous conditions for the financing of their property, set up complicated financing plans and calculated repayment installments. When they move into the house, many people only want one thing: rest. The problem: There is always something to do in a property. And it’s not just about new wallpaper in the living room.


Picture: Dream house 

“Especially with older objects, the follow-up costs are often difficult to assess,” explains Annabel Oelmann from the consumer center North Rhine-Westphalia in Dusseldorf. “Typical here are heating, roof and windows,” the consumer advocate lists some weaknesses. Also, buyers of new homes can not just sit back and reckon with modernization or refurbishment investments.

Therefore, buyers should not forget that they have the necessary financial scope for upcoming repairs. Like owners of condos, homeowners should also make financial reserves. This is especially important because when you buy a self-used property usually the entire savings are used.

Even the mortgage lending should not be “sewn on edge”

Therefore, it is best to think about the reserves as early as possible. “Actually, this should already be taken into account when setting up the financing,” explains Jörg Sahr of Stiftung Warentest in Berlin. “However, the topic is often neglected in discussions with the credit counselors.” And that can be a problem – especially if, given the low interest rates, an expensive property was bought or the monthly installments to the bank are already reaching the limits of their own financial resources anyway.

But how much should the reserves be? There is no such thing as a blanket answer. Because that depends on the object itself. “For new buildings, you are sure to have your peace of mind for the first 10 to 15 years,” says Jörg Sahr. For old buildings looks quite different, because even here earlier repairs may be due.

Nest eggs always in the hindquarters

As a guideline, the experts recommend putting aside about one euro per square meter of living space each month. For example, if you save 150 euros a month, you will have a total of 18,000 euros after ten years – mind you, without interest. Annabel Oelmann basically recommends having three to five monthly net incomes as nest egg on the high ridge. “This can then sometimes pay a defective hot water boiler,” explains the consumer advocate. “For heating, roof or window this is certainly not enough.”

And how should the reserves be formed? There are several possibilities, for example building savings or savings on a money market account. The advantage of building savings, for example, is that after the allocation for a possible home savings loan customers can calculate with a previously fixed loan interest. However, Bauspar contracts are not very flexible. They are recommended for actions that can be planned well in advance.

But if, for example, the roof leaks unexpectedly, reserves on a flexible money market account are better. There, the money is currently with up to 1.3 percent interest.

New installment loan as alternative

However, there is another possibility: “Some banks offer real estate financing to make paid special repayments if necessary,” explains Jörg Sahr. So if a new boiler has to be bought unexpectedly, then in case of doubt borrowers will quickly get money.

Another possibility is, of course, a new loan. But that should rather be the last choice, the experts say. “A roof through which it rains will not last long,” says Oelmann. “But one should bear in mind that consumer loans are subject to comparatively higher interest rates than real estate loans.”


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