Things to Think About Before Buying a Home in Germany

For most individuals, purchasing real estate in Germany is not only a wise investment, but also a place where they and their families will spend the rest of their lives. Unless forced to relocate, most Germans will not abandon the home they purchased or even built themselves. As a result, most people take their time when deciding to buy property in Germany, because it is usually a long-term investment. Furthermore, compared to other nations, a higher percentage of the German population prefers to rent rather than buy a home. Purchasing a home in Germany necessitates much planning. But it’s difficult to know where to begin. Before buying a home in Germany, there are a few things to think about.

1. Is now a good time to invest in real estate?

Germany’s robust economy is steady and growing, according to industry leaders. Residential real estate prices, on the other hand, continue to grow. Housing shortages already exist in several German cities, driving up costs.

“Industry experts predict this tendency to continue for years to come,” according to the German Institute of Urban Affairs.

Indeed, the high demand for property in places such as Berlin, Munich, Frankfurt, and Düsseldorf will be sustained by population expansion. In many German cities, becoming a homeowner might save money in the long run because growing property values also mean higher rent.

With a strong economy, a healthy housing market, and cheap interest rates, now is an excellent moment to invest in real estate in Germany.

2. What is my financial capacity?

In Germany, anyone can apply for a mortgage. Non-Germans have no restrictions when it comes to acquiring property in Germany. It doesn’t matter if you’re an expat, have a blue card, or are an EU or non-EU citizen. The amount you can borrow is determined by whether you reside and work in Germany.

You can borrow up to 100% of the property price if you reside and work in Germany from a reputable online loan company. Overall, your deposit should cover the buying expenses, which will vary depending on the location of the property. Purchase fees often range from 5 to 15% of the property price. Stamp duty, notary fees, and real estate agent tax are examples of such fees. Purchase costs, like a downpayment, are funded by the buyer’s personal equity rather than a bank loan.

3. Where can I look for a home?

In Germany, there are several options for finding a home. The following are some examples of common resources:

  • A web-based resource
  • A real estate agent in the area

Most properties will almost certainly require the assistance of a real estate professional to locate and bid on. To avoid scams, look for an agent who is a member of an association 

Prepare a list of questions for when you visit a property, including inquiries about neighboring transit, schools, and homeowner association costs.

4. How will I be able to pay off my mortgage?

The greatest method to ensure that you can pay off your mortgage is to choose it carefully.

Many homebuyers today choose for a loan with a 10-year fixed interest rate. Some lenders will even allow you to make an extra 5% annual payment. You may need to refinance at a higher interest rate after ten years. Refinancing fees should be factored into your initial budget because even a little increase might increase – and in some cases quadruple – your monthly payment.

It’s a good idea to speak with a broker to determine the best alternative. They can assess choices for you and guide you through the entire process.