OHA when buying a house?

[mbuzbee]

Hello all,

I was wondering if anyone had some real advice on buying a home in Germany. I have spoken to a few people about it and it sounds like a great investment but I still have a few questions.

My husband and I are both active duty AF officers with a max combined housing allowance of over 3000 Euro. I have heard two different things about how OHA works when you buy a home - one person said you get paid the exact amount of your mortgage and another said you get paid your max OHA amount regardless of what the mortgage payment is. If anyone knows the real answer to this it would help us decide whether or not to take this risk.

Also, I've heard the financing in Germany is good but the terms are different than the US. I understand some banks can't handle large loans but will finance your for part of the loan and you either pay the rest out of pocket or find another bank to cover the remainder of the loan. Is this the norm or are there banks locally that can handle large mortgage loans? Also, what kind of rates and terms do they usually use? I heard that 30 year loans are unheard of in Germany so the norm is usually 10-15 years. Can anyone speak to that?

Finally, if anyone has any suggestions for realtors or agents that work with military home buyers and help with the process, I'd be more than willing to take that advice! We are serious about buying but really want to stay in the Ramstein area so if anyone knows of anything coming up for sale or being built, please let us know.

Thanks again, I love this website and learn soooo much every time I'm on it!

Melissa

[Robert Mitchell]

Hello Melissa,

My name is Robert Mitchell and I own Mitchell Consulting. I work with Americans purchasing homes here in the Kaiserslautern area. My main line of business is the financing of homes but in addition as a service I provide consulting through the entire process.

I assist from the first day until all of your closing cost bills are paid. I will inspect the home that you are looking at, arrange all financing, make sure that you are getting the best deal possible and more importantly understand what you are getting into. I have helped many people get out of mortgages that they quite frankly had no idea what they what terms signing up for years ago.

I then set up the Notar appointments (title office in America) with a Notar that speaks English and German. No need for a translator and no extra expenses for this service. You will receive all of your purchase contract documents in both languages. This eliminates any confusion later on.

I will also assist you with the paying of your closing costs. Many people get overwhelmed as the bills come in and have no idea what they are or what they are paying. My service eliminates any frustration.

Many of the rumors that you have heard about buying here are incorrect. 100% financing is certainly obtainable and I can get loans right now up 23 years runtime. Interest rates are between 2.8% and 3.7% depending on how you want to structure the loan.

I charge 1% of the loan amount for the financing services. Included in this is everything above and far more. For about 3-4 months you will hear from me almost daily with updates and assistance. Many references can be provided if desired. I can assure that you and previous customers will agree that I provide the safest, simplest, least stressful way to purchase a home here in Germany that you can find. I think that you will find the small fee is well worth the piece of mind that you are being taken care of with the same detail and care that you would expect to find from a business in America.

I have worked hard to bridge the gap between what we expect at home in terms of service and communication, meshing it with the German system in a way that really is seamless.

I also offer a no cost consultation in my office so that you can get a feel for the process and determine how you would like to proceed.

To reach me you can:

• PM me here on this website
  
• send me an email at robert@mitchell-investment.de or
  
• Call my mobile 0151 405 11880

I am moving offices over the next 3 weeks from Hauptstuhler Straße in Hütschenhausen to Hauptstraße 5 in Landstuhl.

[JOFTAA]

If it is worth anything, Robert is a personal friend of mine. I'd be happy to vouch for his business ethic and knowledge.

[mbuzbee]

Thank you so much for the information. We definately could use this kind of help when the time comes.

[JOFTAA]

Originally Posted by mbuzbee

Thank you so much for the information. We definately could use this kind of help when the time comes.

May I suggest you bookmark this page so you can refer back to it when you arrive. Robert will be of great service for you.

[Robert Mitchell]

Originally Posted by mbuzbee

Thank you so much for the information. We definately could use this kind of help when the time comes.

Melissa, I also wanted to touch on something that you asked and I missed from your original post. Both people that have told you about how your OHA works are incorrect.

You and your husband get 3000€ for your OHA (I guess O3-O4 between the two of you?). How this works in terms of what you get paid for a home you purchase is as follows.

Your OHA or LQA will pay for 10 years on the home you purchase and live in. 10 years is 120 months.

They take the purchase price of your home and divide it by 120 and this is how much you will get for your OHA monthly. If this number is more than your OHA or LQA cap you will get your max allowance and no more.

So lets say you purchase a home for 300,000€

300,000 / 120 = 2500€

You will receive 2500€ per month as your OHA payment or up to your cap.

Your actual mortgage payment does not come into play in how this is calculated. You could come in and pay 300,000€ cash for this home, have no mortgage and you will still receive 2500€ per month OHA or up to your cap.

So if we set you up with a loan for the 300,000€ over roughly 20 years with a payment of 1770€ per month you will receive 2500€. You will earn 730€ per month over your mortgage. Being Active Duty you also will get your 656€ utility allowance in addition to the OHA.

If you are civilian you will use this same formula to determine your LQA but you will not get a specific utility allowance as the Active Duty members do. As a civilian you still reconcile your monthly bills and get those reimbursed just as if you were renting. You will still be limited to your LQA cap for the total of your utilities and 'purchase allowance'.

Payment to Active Duty stays in Euro and fluctuates up and down with the Euro so that you never will see a change in how much you bring in for your home payment and utilities.

Civilian home purchases are converted to US Dollars on the day of the contract and will fluctuate with the Euro and you may notice a change when you have large swings in the Euro. While the utility payments to civilians is reimburse against the actual Euro value so you will never loose on those payments.

No matter what anyone tells you this is exactly how it is figured. It is a great way to increase your income by taking advantage of this allowance. Any money that you have to put into the home purchase will be returned to you ten fold!

[kruture]

I am AD Army and I have some questions similar to the ones I have read, however, my situation is a little different.

I hope to return to Germany next spring/summer (2013), after a 3 year hiatus to Korea. We intend to come command sponsored. My wife, who is French, will then go to France to begin searching for our future home.

I will have 7 years remaining on AD and would like to utilize our OHA, if possible, since I cannot use my VA homeloan overseas.

Does the process work as it is described below worldwide or is this a Germany-specific method for buying a home using OHA?

[chowderisannoying]

I trust him with our money too

[JOFTAA]

Originally Posted by kruture

I am AD Army and I have some questions similar to the ones I have read, however, my situation is a little different.

I hope to return to Germany next spring/summer (2013), after a 3 year hiatus to Korea. We intend to come command sponsored. My wife, who is French, will then go to France to begin searching for our future home.

I will have 7 years remaining on AD and would like to utilize our OHA, if possible, since I cannot use my VA homeloan overseas.

Does the process work as it is described below worldwide or is this a Germany-specific method for buying a home using OHA?

You'd have to adapt it to the rules and regulations of the country you are in.