A Brief Expat Guide to The German Home Buying Process
October • 15th, 2021
by My Mortgage Germany Team
The home buying process in Germany in 10 steps
The process of buying a property is different in every country. If you are interested in buying a house in Germany you will most likely experience that it is quite different than how things are done in your home country. This can make it a bit daunting and perhaps you have no idea where to start. Luckily, there are experts out there who can help you to make this process (or adventure, or journey, or whatever you want to call it) simpler and clearer. Not only because they speak your language, but also because they are, just like you, expats in Germany.
One of these experts is My Mortgage Germany, in this guest blog they will take you through the steps of obtaining a mortgage and buying a home in Munich
1. Do I qualify for a mortgage in Germany?
For many expats, an essential part of buying a property in Munich will be securing a mortgage. Depending on the situation, expats may find the process of buying a house more difficult than German citizens – but getting that mortgage approval is far from impossible. Knowing whether you are eligible for a German mortgage is important. EU, EFTA & Swiss citizens living in Munich who intend to live in their home have different rules and criteria to foreign investors who live outside of Germany and will use the property mainly for rental purposes. Various kinds of visa holders are eligible for mortgages, and some will be rated low-risk by the banks, meaning that they will require less of a deposit than if the banks deem them a higher risk.
If you require further information on finding out if you qualify for a mortgage or any other aspects of kick-starting the mortgage application process, contact My Mortgage Germany.
2. Check what you can afford
Now that you know you qualify for a mortgage in Germany, it is time to find out how much you can afford. Get in touch with one of the English-speaking advisers at My Mortgage by filling in the form at the bottom of this article. Starting communication at an early stage is key so that we can let you know your affordability and help you throughout the process.
You can also play around with these useful mortgage calculators to check your affordability:
3. Research the property market in Munich
Check out the German property portals to find available properties in your price range. Real estate “Maklers” regularly release newsletters to which you can subscribe to receive the latest listings. Property listings can be found at various web resources such as ImmoScout24.
Many real estate websites in Germany have upgraded their interactivity to provide better virtual experiences, which means that physically visiting a property before deciding if you’ll make an offer is not as necessary as it used to be. At the very least, you can disregard the properties that you don’t want, once you’ve taken a virtual tour – and perhaps cut down on the time spent visiting the houses and apartments that catch your eye!
4. Approach the sellers with a Financing Certificate (Finanzierungszertifikat)
When you find something that you do like, let your mortgage advisor at My Mortgage Germany know and they’ll provide you with a Financing Certificate that you can use to contact the seller. A financing certificate is a (non-binding!) confirmation that the selected bank would support your property purchase with a mortgage. Neither you nor the bank is obliged to enter into an actual mortgage loan agreement, but having this certificate will give you an advantage over other buyers interested in the property.
5. Make an offer
Once you have found your dream home, you can make an offer. Contact your advisor as soon as the offer is accepted to begin the mortgage application process. There are no specific rules to make an offer, usually, the buyer (that's you in this case) offers the asking price to the seller or 'Makler' (real estate agent).
6. Upload your documents through our easy-to-use client portal
Once your mortgage advisor finds you the best interest rate that’s available to you from over 400 lenders, you can submit the required personal and property-related documentation through the My Mortgage Germany easy-to-use client portal.
7. The arrival of the loan contract
Once you’ve taken the advice of your mortgage advisor and chosen the best mortgage product for you, your application will be submitted, along with the required documents, to the lender to have your application approved. After any additional questions from the lender have been answered, they will inform your mortgage advisor of the approval and send the loan contract directly to you for signature.
8. Signing the purchase contract
Either you or the seller will have chosen the notary (preferably – if your German isn’t fluent – an English speaker who’s comfortable engaging with you in English). The notary is responsible for drafting the purchase contract. Within 14 days of signing your loan agreement, you will need to visit the notary’s office where the contract will be read aloud, any final changes will be made, and the contract will be signed.
9. Determine if there are any further costs
There are fees associated with purchasing a property. For example, the notary is paid a fee. The real estate agent, if applicable, also incurs fees. You then pay the deposit amount – as stipulated by your financial institution – to the seller. Your lender then pays the balance of the property cost directly to the seller’s account. A few weeks after that, you will be asked to pay the property tax, or Grunderwerbsteuer, to ensure the property ownership is transferred to you in the land register or Grundbuch.
10. Sit back and enjoy the home comforts
With all of this paperwork complete and all of the fees paid, the final step of purchasing your Munich property simply involves enjoying the comforts of your new home. And we’ll look forward to an invitation to your house-warming. Congratulations!
Any questions? Need help? Get in touch with My Mortgage Germany
Do you have any questions about getting a mortgage in Germany or the process of buying a house in Germany? Get in touch with the English-speaking experts at My Mortgage Germany by filling in this form: