Every beginning is hard — including when it comes to buying a home, such as an owner-occupied flat (ejerlejlighed). The process can come with a lot of uncertainty and fear of making the wrong choice.
Read more about buying a flat here.
When you're about to buy a flat as a first-time buyer, it can be a really good idea to team up with a buyer's advisor like Bomae, who has the full overview and can advise you on both the big and small things related to your home purchase.
We also handle the dialogue with the banks for you if you'd like — that way, we make sure to negotiate the best terms on your behalf.
What should you think about as a first-time buyer of a flat?
- How many years do you want to live in the home? Does it fit with plans you have, for example around growing your family?
- Do you want to be able to rent the home out at some point? If so, you should consider whether it's suitable for co-living, as this improves your chances of being able to rent it out.
- How much work needs to be done on the home, and is that realistic within your budget? Consider bringing a tradesperson along to look before you bid.
- Remember your gut feeling. It's rarely wrong.
- What does the ownership expense (ejerudgift) look like in the sales listing for the specific flat?
How much can you borrow as a first-time buyer purchasing a flat? When the bank assesses how much you can borrow for your new home, they look at, among other things, your age, debt, income, disposable income and down payment.
The down payment naturally matters a great deal, and the higher your gældsfaktor (debt-to-income factor) is, the higher the requirement for the size of your down payment. You find your debt-to-income factor by dividing your household's total debt by your household's annual income before tax.
Do you need to be able to put down 5% as a down payment?
In 2015, a requirement was introduced that you must be able to put down at least 5% as a down payment on your new home. That's why the 5% figure is often used as a rule of thumb for how much you need to be able to pay in cash as a down payment when buying a home.
This can, however, vary a lot from person to person, and there are some exception rules that mean that in some cases you may be allowed to buy a home even if you can't put down the 5%.
Are there exceptions to the minimum requirement of 5% down payment? The exception rules for the 5% depend on the individual bank, but they could, for example, include:
- You have significantly higher disposable income after the home purchase than what the bank normally recommends
- You can pay down your loan faster, so that within 2-3 years you owe a maximum of 95% of the home's value
- Due to your previous income you haven't had the chance to save up, but you now have a fixed income that's significantly higher (for example if you were a student or job-seeker but now have a permanent job)
If your bank requires more than the 5% If your bank, on the other hand, requires more than 5% down payment plus the external costs, it's a good idea to check with an independent advisor, like Bomae, to look at your situation. There can be significant differences from bank to bank, and they don't always interpret the rules and the exception rules the same way.
At Bomae, we map out your needs and wishes and advise you based on your situation.
Remember the external costs
In addition to the amount you need to put down as a down payment, you also need to remember to have set money aside for the external costs. These could, for example, be registration of the deed (tinglysning af skødet), an external advisor/legal advisor such as Bomae, and fees to the owners' association (ejerforening). There can be some costs associated with taking over ownership of the flat in question.
Also read: Buying a flat, what now? The association's finances Help with buying a home Protect yourself against unpleasant surprises
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