Bridging the financial gap with a "bridge" loan

The security of the inherited house is worth nothing to the bank if your salary is not subject to garnishment due to being abroad. Every bank tries to avoid foreclosure and to have as little work as possible with the loan. Lending €500,000 for 6 months is not a good business. It is only worthwhile for the bank if you commit for at least 10 years and keep the house.

yes, but the bank needs something in writing. I could also say my neighbor Egon is dead and I am the heir. But I don’t have anything in writing.

So, basically a blank loan.

As far as I know: To prove that Egon was the deceased testator and who was generously considered by him, the presentation of the will and a (certified) copy of the death certificate is sufficient.
A certificate of inheritance already costs €870 for an inheritance of €200,000, and for €500,000 the fees amount to €1,870. In most cases, that is a waste of money.

The security of the inherited house is worth nothing to the bank if your salary is not subject to garnishment because of being abroad. Every bank tries to avoid forced auction and to have as little work as possible with the loan. Lending €500,000 for 6 months is not a good business. It only pays off for the bank if you commit for at least 10 years and keep the house.

Apart from the abroad issue, we don’t receive salaries, we are both self-employed. I don’t understand why lending, with the registration of a mortgage on the inherited house, should be different from a 10-year loan. I expect this to be reflected in the interest rate, but why shouldn’t it be a business? If the house is sold behind our backs, the mortgage will be redeemed, the notary takes care of that. What’s against that?

To my knowledge: To prove that Egon was the deceased testator and who was generously considered by him, it is sufficient to present the will and a (certified) copy of the death certificate.
A certificate of inheritance already costs €870 for an inheritance of €200,000, and for €500,000 fees of €1870 are incurred. In most cases, that is a waste of money.

Apart from abroad, we do not receive salaries; we are both self-employed. I don’t understand why granting a loan with the registration of a land charge on the inherited house should be any different than a 10-year loan. I expect that to be reflected in the interest rate, but why shouldn’t it be a business? If the house is sold behind our backs, the land charge is redeemed; the notary takes care of that. What speaks against it?

If you are self-employed, your house bank knows you very well.

Apart from abroad, we do not receive salaries, we are both self-employed. I don’t understand why granting a loan with the registration of a land charge on the inherited house should somehow be different from a 10-year loan. I expect that to be reflected in the interest rate, but why should that not be a deal? If the house is sold behind our backs, the land charge will be redeemed, the notary will take care of that. What speaks against it?
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6 months interest (2% / year) for 500,000 amounts to 5,000.--
10 years interest (1% / year) amounts to 40,000 depending on repayment.
The effort for the bank is almost the same.
If you don’t pay, the bank cannot access your income and the foreclosure is more complicated because of abroad.

6 months interest (2% / year) on 500,000 amounts to 5,000.--
10 years interest (1% / year) amounts to 40,000 depending on repayment.--
The bank's effort is almost the same.
If you don't pay, the bank cannot access your income and the foreclosure is more complicated due to abroad

Sorry, this is really quite a bad milkmaid calculation. We have to work at least annualized. Even then, with this still completely unrealistically simplified calculation, the interest income in year 1 for the bank is 10,000, not 5,000.
Compared to 4,000 in year 1 with the 10-year mortgage.
You must not ignore that the bank can reinvest the capital after the 6 months in the example. But even that is misleading; banks do not lend money that just sits in their vault or on bank-owned accounts.

By the way, the inherited house is in Germany, so why shouldn't the bank want to consider that as security? It can't be the first time that a tax non-resident owns real estate in Germany.

Sorry, this is really quite a terrible back-of-the-envelope calculation. We have to work at least on an annualized basis. Even then, with this still completely unrealistically simplified calculation, the interest income in year 1 for the bank is 10,000, not 5,000. Compared to 4,000 in year 1 with the 10-year mortgage. You must not ignore that the bank can reinvest the capital again after the 6 months in the example. But even that is shaky, banks do not lend money that is sitting in their vault or in bank-owned accounts. By the way, the inheritance property is in Germany, why shouldn’t the bank want to consider that as collateral? It cannot be the first time that a tax expatriate owns real estate in Germany.

I believe I can calculate. 1% of 500,000 is 5,000 per year—and then a little less each year due to amortization. That results in about 40,000 interest to be paid after 10 years, with little amortization. And a bank does not even make a financing if 90% equity is present but no usable income. That’s why many retirees have problems financing renovations due to too small a pension. Consumer loans only go up to 30,000 with significantly higher interest rates.