Buying a house without equity

Hi,

a friend of mine wanted to buy a house here in Munich and she found a good deal for the house which was private-vekaüfer (no makler involved). So her question, what is the procedure involved in order to register the house on her name? She doesn't have any saved money nor any financial back-ups, so she want to get 100% bank loan, in this case which bank do provide loan in very low interest rates. Do the banks agree for giving loan, even she doesn't have any financial back up other than her well paid job.

Thanks.

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I don't know the exact amount, but Germany insists on quite high private financing (something like 40%- or maybe best case 25% - of your own capital I believe) in comparison with many other countries. Germany is known as not a home-owners market; most people rent (or buy a place to rent out to other people, because in a tax sense Germany is also not kind to people buying property to live in themselves).
I doubt very much whether your friend will find anyone to give 100% financing.

Someone else did that here - but it was a couple, and they used diba I think.

Yes, we did it...sort of. We financed close to 100% BUT we had several thousands of Euros for other things - like lawyers, inspections, taxes, etc. You need that money above all else. If she has no money saved the bank will probably not be thrilled about it. Plus, you need back up money just in case something else goes wrong (like what happened to us and ended up costing us 6000€ to fix). There are a lot of 'hidden' costs in owning a home.

It is not impossible and would in all probability depend on just what her well paid job is and pays. This will go for the banks and the debt book (grundschuldung). Getting Munich to allow it will be the biggest problem. Even if she obtains 100% financing, they can nix the deal.
Most national banks and some regional banks will lend that kind of money 100% if one qualifies. If she can afford it, I would suggest that she gets a financial advisor to guide her as she will need life insurance and other such instruments to back the loan and also to help in deciding the rates and principle/interest repayment plan.

Having just bought a house I'd say it would be difficult with no savings. How long has she had this job and if she is earning big money why hasn't she saved any of it ?

The best rates I found were on the internet (Dr. Klein) but they insist on a big deposit. We managed to bypass the makler and deal directly with the owner (neither side having any scruples in this area) but you then need to engage a notar to do the legal bits (Grundbuch, etc.). Notars also cost money !

If she does get legal advice tell her to agree a fee beforehand. I got badly stung with a lawyer charging me a % of the house price for checking the contract.

- Corcaigh

You can't buy a house without a Notar.

She would need to take into account the extra fees also ie Grundsteuer. All in the fees average around 10% in most case so if she has no savings she can forget it.

If she can manage to save 15% or so then she could go to Dr Klein, get a quote, take it to her bank, and they'll match whatever Dr Klein quotes.

She needs to remember that the more of a deposit she puts down the lower the rate of interest she can negotiate.

Hi,the average capital you need is about30% but if you have some kind of securities ie"car,life insurance" itc you might try the Diba.