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Video: Modernize property: finance renovation with building society contract
Building society contracts do more than just help you acquire your own property. A building society contract can also finance modernization and renovation. If necessary: immediately!
Peter Gerstner is actually a prudent person. The fifty-year-old physiotherapist from Bremen is doing well financially. But when he moved into his own home with his wife and young children fifteen years ago, money was scarce. Over the past few years he has kept thinking of putting something back for renovation work, but there have always been other investments. And so he got cold when the exterior plaster started to crumble two months ago and then the heating system also gave up.
Roland Hustert, managing director of LBS Immobilen NordWest, knows the problem. Anyone who buys a condominium automatically creates reserves for repair and renovation with the obligatory house allowance. Hustert knows that owners of single-family homes also understand that financial provision is important: "But by no means everyone will put their theoretical knowledge into concrete savings plans."
Split the reserves
With two home loan savings contracts, residential property owners skilfully build up reserves for their medium and long-term needs.
|60 euros per month||60 euros per month|
|Home savings sum
10, 000 euros
|Home savings sum
20, 000 euros
|Possibility of use
after 7 years
|Possibility of use
after 11 years
- The calculation example applies to a residential property with approximately 120 square meters of living space.
- One euro for every square meter of living space - this is how much owners should cover each month.
- Thanks to the division into two building loan contracts, owners can use 30, 000 euros flexibly
Many owners underestimate the maintenance costs of their property. Who, like Gerstner, has to finance a new heating system after 15 years needs at least 9, 000 euros. How long the exterior plaster lasts depends on local environmental influences. Renewing the facade of a single-family house costs from 10, 000 euros. In order to reduce heating costs in the future, it is worthwhile installing thermal insulation at the same time. This energetic measure costs at least 8, 000 euros. A lot comes together. Fortunately, savers can master financing more easily.
Because the building savings can not only be used for the purchase of real estate, but also for renovation and modernization. It is crucial that the loan is used for residential purposes. Building society savings is often the solution if the existing reserves are not sufficient for the necessary construction work. If the heating strikes, as with the Gerstner family, a new system must be financed quickly. Peter Gerstner therefore chooses a combination loan consisting of a pre-financing loan and a home loan contract. This form of financing has become increasingly popular in recent years. Either the LBS or a savings bank provides the loan. The LBS consultant knows which tariff makes the most sense in individual cases.
Plan with interest rates
In concrete terms, immediate financing works like this: The customer takes out a repayment-free loan and at the same time concludes a home loan savings contract for the loan amount. When the savings amount is then ready for allocation after a few years, it will replace the loan in one fell swoop. Now the customer only pays the installments for the home loan. This form of financing has the advantage that building society savers can immediately access the entire loan amount. The monthly installments and interest are fixed for the entire term.
Secure the future
This planning security convinced Gerstner, and he opted for thermal insulation on the roof and walls. Including plaster and new heating, the measure costs 40, 000 euros. For the next eight years, he will pay around 300 euros a month. From the ninth year, the monthly charge is reduced by around 50 euros. Gerstner wants to invest this money again right away - in a new building society contract. Because the family would like to refresh their bathroom in a few years.
Roland Hustert, Managing Director LBS Immobilien NordWest
Photo: LBS current
Expert advice: "Build up reserves!"
Congratulations - you did it! The house is bought, everything is tailored to your needs. For all your joy, you shouldn't forget one thing now: health insurance for your home! It is not only with us that the aches and pains increase in old age, residential real estate is also getting on in years.
Take precautions and build reserves. With just one euro per square meter a month, you are on the safe side. And the easiest way to build up reserves is to use home savings here too - ideally with two contracts. For a property with 120 square meters, this means that you split the reserve in half and save the first 60 euros so that the money is available after about seven years. Then maybe it's time for a garage or a solar system.
Keeping costs under control
You invest the second half in the long term. This means that after just eleven years you can receive a home savings sum of 20, 000 euros. A good financial cushion for most contingencies."
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