Our new flat: 2. The Purchase

I’m catching up on some blogging this week.  Yesterday I reported on our decision to buy a new flat.  Today, a look at our how we actually went ahead to buy it.

Convincing a bank to lend you money for a mortgage is basically a matter of convincing the bank that (a) the property that you want to buy is worth that much – should they want to repossess it at some point, and (b) that you can afford the repayments.

If you are in a steady job, that (b) is not really going to be a problem.  You show the bank your last wage slip and answer some questions about your lifestyle, and they take their decision.

Being self-employed makes it all rather more difficult.  I went to the bank armed with all sorts of facts and figures about my business, our insurance contracts, and any other expenses that we regularly have.  Actually, I’d had a lot of the figures worked out for a long time and and just needed to update them using our accounting software.  If the bank were going to ask me to guess something, such as how much we spend on food each month, then they were going to get an exact answer.

Instead of going to my usual branch, I had to go to a different office that dealt specifically with self-employed customers.  I am pleased to be able to write that I covered almost everything that they wanted to know, and only three items remained.  One of this was something called a Betriebswirtschaftliche Auswertung – basically this is a financial statement about my company that is produced by my tax advisor.  I rang him straight away (Friday afternoon) and by Monday morning I had everything I needed and forwarded it to the bank.  One of the other items was a SCHUFA check.  This is to make sure that we didn’t have any bad debts.  SCHUFA is not something that should be under-estimated.  If you get a bad entry on their database, it can be difficult to get credit with a bank or financing company.

The bank did not take long to reach a decision – on Monday afternoon I was on my way to pick our daughter up from Kindergarten, when my mobile rang to tell me that we could go ahead with the purchase.

I called the estate agent right away, and he set the wheels in motion…

Our new flat: 1. The Decision

For the past few weeks I have been so busy, that I’ve hardly had time to write in any of my blogs, and AllThingsGerman seems to have suffered particularly badly – with the exception of the podcasts.

I did report on the reason for this in a recent podcast: we have moved into a new flat.

The story begins back in April when I spotted a “for sale” sign on a 4-room flat this is, sorry was, visible from our balcony.  We had several reasons for wanting to move.  The main ones were (a) size and (b) financial.

Size: until last week we lived in a three-room flat, ie. two bedrooms and a living room (the kitchen and the bathroom do not count in the ‘official’ number of rooms).  This meant that my office was effectively a corner of the living room.  Well, at least that’s how it started out.  By the time we moved it was more like two corners of the living room and a good part of one of the walls, as well as a corner of the bedroom and part of the cellar.

We had been looking for a solution to this situation for some time, but other than re-arranging the flat we did not have that many options available as I was reluctant to rent an office anywhere else.  I often work in the evenings when our daughter is in bed, which would make an office in another building inpracticable.  Having a separate office in our own flat definitely sounded like a good idea.

Financial: we had been renting our previous flat for five years, and although this was at a fair price, we did at some stage want to have something that we owned.  After all, we worked out that for the amount we were paying in rent we could afford to pay a mortgage instead.  If we stayed where we were, we would have paid several thousands of Euros to our landlord, and still not have anything to call our own at the end of it.

So we made an appointment to see the flat that was for sale.  Unfortunately by the time we got to visit it, it was a good as sold, but the estate agent told as about another – almost identical – flat in a building a couple of streets away and we went to look at it.

As it turned out, the second flat was maybe a little further away (I had rather fancied moving between the flats by carrying everthing across the car park, now it was a drive around the corner instead 🙂 ) but it was in a better state.  All the rooms had been redecorated and the bathrooms had been completely renewed.  Only the kitchen needed replacing.

Most importantly of all, it had a room that could be used as an office, situated away from the bedrooms so that late-night work would not disturb anyone.

It did not take long for us to make up our mind.  It was time to call the bank.

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