Many future owners have a clear image of what their first home should look like later on. It should ideally be spacious so that all family members have plenty of room. A garden for playing and relaxing is also very appealing. But is this an affordable dream? Although there is lots of help in Germany for first-time buyers, you will need to take a close look at your budget and prove affordability. Let's look at what is available and what you need to know to make your dream a reality.
The first step on your homebuying journey should be calculating your income and expenses. This gives you a preliminary overview of your financial situation. It is advisable to find out about the level of ancillary costs when buying a house, such as real estate transfer tax and land registry costs, to get an overview. In the case of old buildings, in particular, you may face additional costs for modernization in addition to the purchase costs. Your equity should best cover these additional costs. In addition to income from savings accounts, for example, equity also includes income from inheritance and gifts. After you know your budget, you can start looking for apartments.
The next step on your home purchase process checklist is touring potential apartments. Older buildings are usually sold through an estate agent or a private seller. When buying a new-build apartment, you can get an impression of your future home based on exposés and construction plans, as well as visualizations. A viewing of the finished building is possible before the contract is signed. Before concluding a sales contract, it is a good idea to visit several houses to set realistic expectations. Visit in daylight if at all possible. During the tour, you can carry out an initial room allocation to ensure optimal use of the space. Make a note of any questions you may have before the appointment when you want to see the building.
Good questions to consider include:
✔️ What is the condition of the house? ✔️ What is already there, and what still needs to be done? (Underfloor heating, cavity wall insulation) ✔️ Are the windows double or triple glazed? ✔️ Where do the power lines run? ✔️ Are there any access issues?
If you have found your dream property and would like to move in immediately, you have come one step closer to your dream of having your own four walls. Now it is essential to arrange the financing with your bank. The following documents are usually required so that the bank can check your creditworthiness:
✔️ The last three salary statements
✔️ Current pension information
✔️ Last income tax assessment
✔️ Your signed SCHUFA self-assessment
✔️ Proof of private health insurance
✔️ Proof of further credit
You will also need to provide a notification of impending bankruptcy proceedings or previous asset losses by a bailiff in the last five years.
The bank will also require information about the property. Therefore, the following documents must be submitted:
✔️ Purchase contract or excerpt from the land register ✔️ Construction plan / floor plan ✔️ Zoning plan ✔️ Gross floor area calculation ✔️ Calculation of living / usable space ✔️ Location plan, building description ✔️ Construction cost estimate ✔️ Approved building application ✔️ Copy of shell insurance ✔️ List of personal contribution ✔️ Declaration of division ✔️ Calculation of ancillary costs ✔️ Extract from the directory of building loads ✔️ Development costs ✔️ Cost estimate ✔️ Expose ✔️ Photos of the property ✔️ Copy of building insurance
This list is only an overview of the documents that a bank can request, and different documents may be required.
Buying a home for the first time can be very costly. Fortunately, the German government offers several grants and subsidies for property owners to offset the expenses of the home buying process. These include the KfW homeownership programme, the KfW energy-efficient building loan, KfW energy-efficient renovation subsidy, KfW child benefit for homeowners, and the Riester homeownership pension scheme.
If you have any further questions about buying a home for the first time in Germany, don't hesitate to reach out. Our experienced consultants are here to assist you on your home-buying journey.