Why pay back your mortgage if you don't have to? Borrowing money in Sweden

As you well know, if you read this blog, the saga of our endless search for a home continues. And that means I spend a lot of time reading the newspaper about the state of the housing market. And right now the Swedish central bank, the International Monetary Fund, and the EU central bank are all fighting with the Swedish government because, it the government thinks it is soooo stupid to pay back your damn mortgage.

At least that is what all of the finance experts in Sweden have to say. Would you be surprised to find that all of the finance experts are employed by the banks?

OK the theory is this:  It is silly to pay off your mortgage, ever. Better to invest that money in something else. The bank will get its money back when the house is sold. You pay interest on the loan. Everyone is happy. Because, as we well know well, housing prices only go up.

Lately there has been a change in tune, and the government is ‘encouraging’ the banks to ‘encourage’ their customers to amortize 25% of their mortgages. That is correct. Over the life of the loan, you are expected to only pay back 25%. That means, if you actually made a full downpayment of 15%, you are only amortizing on 10% of the actual cost of your house (yes, this does mean that housing costs are crazily inflated to reflect this fact).

Most of the Swedish central bank employees are all like ‘We shouldn’t FORCE people to pay back their mortgages, because sometimes people fall on hard times and if we force them it would not be good for the economy’

Yes, the banks are saying it is silly to expect people to pay back loans on a monthly basis.

We went to one meeting with the bank that is starting to encourage 60 year amortization and was told ‘don’t worry, probably when you get to 50% we can talk about stopping amortization’ and I was all ‘you Swedes are crazy!’ I mentioned a 30 year payment plan at our first mortgage meeting with one bank. Let’s just say that subject won’t come up again.

The good news: The good news is that due to the crazy structure, you can amortize at an accelerated rate without any penalty. At least that is what they say.

The bad news is: Seriously, no one is paying back their loans.

So is Sweden the only country that loans out hundreds of thousands of dollars and does not expect repayment until the house is sold? I have read that Finland has 30 year loans, and I know even crisis country Spain does as well.

Are there other regions where they think ‘amortize smamortize?’

Because everyone seems to look at home equity like it is something that should be used long before you die, they keep giving these huge mortgages to people in their 60s, and I am left, once again, mind boggled and rather terrified by the whole thing. 

We need to talk about Kewin – Swedish name trends

So there is this strange naming trend in Sweden going on that is not so far off from some American style baby naming trends --- Not the Aiden, Caden, Jaden’s because, they are obviously so 2010, or even the Wyatt, Bennett, Lincolns of late, but the W kids.

In Sweden W and V are interchangeable and they even do not get separate sections in the phone book. So it makes sense that people would try to give their kids a uneeek name like Kewin.

But it does not stop there, some names I have seen this year include:

Wiktor

Oliwer

And the all American

Wincent – because how you go wrong naming your child something with Win in it.

But Kewin just makes me giggle. And I just see their future blonde Swedish rap name K-win  in the future.

I am not sure if these names are traditional, are inspired by Hemmakwell ads, or just a way to have your Swedish kids stand out in a crowd.

While the W names seem to be mainly male, I have seen a few people suggest Towa, in stead of Tova. But I have not seen any Nowa instead of Nova. Maybe that will be the wave of the future? 

Please don’t show up on my doorstep on my birthday(aka Undenbedes ads)

One of my favorite little quirks about Swedish newspapers is, undoubtedly, the Undenbedes ads. There is an entire section of Swedish newspapers devoted to Swedish people saying things like ‘Do not show up at my house on my birthday, I will be in Thailand’ or more simply ‘Please don’t come to my house on my birthday.’

I was afraid, with the arrival of the internet, this mysterious section of the newspaper would disappear. But so far, it has not.

The undenbedes ads make me wonder all kinds of things like:

Who are these mysterious people who show up uninvited and without calling on your birthday? Where do I get me some?

Who would show up uninvited to your house on your birthday and NOT know that you have booked a birthday trip to Thailand?

Do they not call their friends and find out what time the birthday party is, but do check the newspaper to see if a party is on at Sven Svensson’s house?

More importantly, would they leave the gift on your doorstep?

Is this a senior citizen group activity? Aka –‘What are we going to do this weekend?’ ‘Wait, isn’t Sven turning 87 this Sunday? I bet he will have some cake!’ ‘Oh, good idea Inga, let’s order a taxi and invite ourselves to his party’ ‘Brilliant, then we can save all of our cinnamon buns for the weekday fikas instead’ ‘And we can regift this old embroidered wall hanging and pretend like we made it and didn’t buy it off of Ingrid’s estate sale’  

I hope one day I have so many Swedish friends that I will need to uninvite them to my birthday party via the local newspaper. Oh who am I kidding, I cannot resist a great birthday party and would be thrilled if any Swede showed up at my doorstep without 2 weeks of advance planning

But can I also admit that I believe there is a large group of Swedish thieves that thrive on the undenbedes ads as well? ‘Hey look, Joakim von partypooper is going to Thailand for his birthday. According to the registry his birthday is Nov. 5^th, he lives at 4 fågelgatan, and his income is xyz. Looks like we have a place to be on Nov 5^th, don’t we den of thieves?’

So, um, you are all welcome to my place on my big day as I will most certainly not be in Thailand.

The trouble with Hemnet

Hi my name is Surviving in Sweden and I am addicted to Hemnet, along with 75% of the Swedish population.

As you know, we have been looking for a house. It is not going well. We are trying to remain optimistic.

But that doesn’t matter because I have been reading Hemnet for years. Hement.se is the website where a large majority of houses and apartments for sale in Sweden are advertised. Most real estate agents post all of their properties there. And most Swedes read it obsessively.

Many a late night drinking session has turned into a ‘Did you see THAT house on Hemnet?’ ‘oh, you are obsessed with Hemnet, too? What about THAT house’

Everyone knows the house that has been listed for 6 months (what is WRONG with it anyway), the house with the crazy layout (who has a 200 square meter house with ONE bedroom) or the beautiful house for 10 million SEK that we all dream about.

Here are a few things I have learned since actually starting to view real life houses and not just Hemnet:

1) Professional photographers make their real money from Hemnet – At least I hope they are paying these guys well. The photos are amazing. And then you get there. And you see how kind of, maybe, if the light came in just from that angle, it might look that nice – but you will have to knock down that wall, rewallpaper and put in new flooring in what looked like a totally acceptable room.

2) This house looks familiar – If a house stays on Hemnet for more than 90 days it is like the kiss of death. While most housing markets, 90 days does not signal the end of the world, in Hemnet land it means ‘nobody loves me’. So very often (although they would never ever ever admit it), real estate agents take down houses for the necessary 23 odd days, and then repost, perhaps with new photos and sometimes even a new price, to start the clock again.

3) Lower price not always good – These days the housing market in Sweden is doing weird things. Is it up? Is it down? No one seems to know, least of all the statisticians (Last month one study showed prices up, and another showed them down).  When real estate agents need a property to move faster, they sometimes add a ‘price dropped 5-10%’. In many other places this might lead some people to place a bid. In my informal studies of Hemnet, this is also a bit of a kiss of death. The instant you think people do not want a house, you do not want that house either. A lower price? Not always good.

There is much to learn from Hemnet. I often wonder ‘Where are all the books?’ when I see endless photos of Swedish homes. But even more often I wonder ‘Where is all of the stuff?’ because everything is so damn minimalistic! There is no homey atmosphere, at showings there is no smell of baking cookies. Instead it is bare, open space and the same white kitchen ad nausea.

One day Hemnet will lead me to my dream home. And when it does, I will have to slowly wean myself away from my Hemnet addiction, so I don’t go back and compare and think about what could have been.