Here's what you need to know when buying a property in Germany
If you’ve lived in Germany for a few years, and come to love the place, it’s only natural that you would eventually want to purchase a property to call home. The good news is, it’s an attainable goal for expats - although there can be obstacles.
Together with mortgage advisor, Hypofriend, we outline the steps you’ll need to follow to buy your German property, and how their powerful tech platform and English-language advice service, can make the experience a much easier process.
Recognizing that purchasing property is one of the biggest decisions we make in our lives, Hypofriend was created to give expat borrowers peace of mind as they begin their journey to home ownership.
Ready to begin your journey to home ownership in Germany? See what you can afford with Hypofriend.
Step one - Determine your budget
Before you start looking for your dream apartment, you should find out how much you can actually afford and how much money the bank would lend you for a purchase. To do this, you can use the Hypofriend Affordability Calculator. This will give you an initial estimate of what the bank is willing to lend you given your financial and personal situation.
One benefit of using Hypofriend is that once your borrowing potential has been assessed by the mortgage calculator and you have uploaded the relevant documents, you can receive a free financing certificate, which can be invaluable in putting you at the front of the queue when it comes to securing your dream home.
Be aware that there may be problems if your employment status or residency status is unusual or temporary. If this is the case, you should already be talking to an independent mortgage advisor like Hypofriend..
Step two - Start looking
After you know how much you can afford, you can start finding your dream property. It can be difficult, but it can also be a lot of fun! Either way, it pays to search thoroughly, as the German market is far from transparent.
One way of circumventing this problem is through working with the locals, whether they be friends or acquaintances. Germans can be quite motivated to discuss property prices and finding the right place to live, and there’s often a lot of pride associated with doing so. Property is a serious business, and people will generally treat your inquiries seriously and give honest answers. Don’t be afraid to ask questions about what it’s like to live in a certain area - you’ll be surprised how candid the answers can be.
Word of mouth is also a powerful thing in Germany. You’ll also be surprised how many people know of a flat or home going to the market, and who would only be too happy to put you in touch with the seller, or their makler.
Of course, it is also worth registering on the well-known real estate websites and setting up an alert that will notify you when a property of interest to you comes on the market. Having registered with Hypofriend can also support you at this stage - with their Property Radar you will receive an update once a week with listings that are in your price range.
Once you've found a property you love and definitely want to buy, you will have to reserve it with the makler. Here's where the paperwork begins, and it is now time to secure your mortgage.
Step three - Convince the bank
Securing a mortgage in Germany, with foreign laws, systems and language can seem impenetrable. The temptation is to sign at the first sign of a deal, but this can lead to you being ripped off, either by unscrupulous lenders, or banks not having a full understanding of your situation.
If you can ‘bring a friend’, a more experienced borrower to watch over the process, this can avoid many pitfalls. If your workplace has individuals earmarked for such a purpose, it’s a very, very good idea to get them onboard. Whatever you do, always organize to have some ‘breathing room’ at each stage in the process before you sign anything, or proceed.
Luckily, in Germany, a lot of the convincing can be done through paperwork. Yes, you’ll be asked to provide mountains of documentation, such as financial statements, work contracts and and yes, this can be a struggle. You will be asked to provide residency permits, and sometimes banks may refuse to recognize them for one reason or another.
As infuriating as this can be, it pays to remember that patience is a virtue. If something isn’t recognized, or more documentation is required, take note of what exactly is needed and send it in. It may take time, but the banks need to do their due diligence. Remember, a paper trail is valuable for both parties.
Registering with a Hypofriend mortgage advisor can do much to smooth the way, with video and phone meetings to walk you step by step through the process, ensuring that you supply what is needed, when it is needed, and that the best mortgage for you is approved.
Once your mortgage is approved, this isn't the end of the process. There remains a lot of steps involving the transfer of funds and the payment of various fees before you can access your new home. Again, working with Hypofriend through this process will ensure that you don't fall prey to any hidden costs or delays.
A safer way to secure a mortgage
A mortgage calculator and advisory service, Hypofriend works with potential property owners to work out exactly what they can afford, and the best mortgage for their situation. This is achieved by using a powerful recommendation engine, and algorithm-powered mortgage experts to match borrowers with lenders. Combined with this powerful tech, Hypofriend utilises video chats with online mortgage advisors to assess your needs and find the best lender.
Best of all, Hypofriend is a free service to prospective home buyers, working with more than 750 German lenders to help more people into home ownership. At no point will you be charged for the advice you receive - and that’s an important consideration when borrowing a substantial sum of money!
Have you decided to make your home in Germany? Would you like to know what you can afford? Save time and worry and learn more about Hypofriend today.
This content was paid for by an advertiser and produced by The Local's Creative Studio.