Buy existing property

Hello dear forum,

my fiancé and I (both 23) are considering buying an end-of-terrace house.

Cost 160,000 €

In addition, there would be realtor fees of 3.57%, property transfer tax of 5%, and notary fees of 1.5% coming our way.
The incidental purchase costs are just under 16,000 €.

Unfortunately, we have no equity, except for 10,000 € in a savings book and 5,500 € in the form of existing but not yet allocable building savings contracts.

We have now received different financing offers:

Option 1:
KFW loan of 50,000 € = 194 €
160,000 € fixed loan bank = 9 years / 397 € (2.98%) (50,000 € are placed in a building savings contract)
Private loan of 12,000 € (renovation costs and notary fees) = 7 years 181 €

After 9 years the building savings contract will be allocable and we would still pay off the loan/building savings contract for 18 years at 2.8%.

Does this option make sense? An advantage would definitely be that you have secured the low interest rates.
Does it make sense to finance the renovation costs and notary by private loan or to take 50,000 € more and use it as a lump sum payment in the building savings contract?

I’m slowly at a loss, maybe we should save diligently for 10/15 years first, but we have now found such a nice house for us.

Option 2:

KFW loan 50,000 € = 194 €
Annuity loan over 110,000 € = interest secured for 15 years was over 4% interest, repayment 1.25% = 481 €
Private loan of 12,000 € = 181 € for 7 years

After the private loan is paid off, we would put the amount into the annuity loan.

So please share your opinions, many thanks in advance :)

Best regards allesdoof:confused:

Option 1:
KFW loan over €50,000 = €194
€160,000 fixed loan bank = 9 years / €397 (2.98%) (€50,000 are put into a building savings contract)
Private loan over €12,000 (renovation costs and notary fees) = 7 years €181

After 9 years, the building savings contract becomes eligible and we would still repay the loan/building savings contract for 18 years at 2.8%.

Makes a total volume of €222,000
Far too high for the requirement you calculated.

Option 2:
KFW loan €50,000 = €194
Annuity loan over €110,000 = interest secured for 15 years was over 4% interest, repayment 1.25% = €481
Private loan of €12,000 = €181 for 7 years

After the private loan is repaid, we would put the amount into the annuity loan.

Makes a total volume of €172,000
Too low for the requirement you calculated. Unless equity is to be included here.

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What is the private loan of €12,000 for? That’s still a good 7% interest.
Are you sure the calculation for the renovation is sufficient? That is often underestimated.
What is your budget / max monthly burden?

I think this is a win-win situation for everyone except for you.

In general, this sounds a lot like a bank with a blue-orange logo with a V in it :)
The bank only offers construction loans up to a certain loan-to-value limit. Everything else is done through consumer loans of a subsidiary.

Go to an independent broker. There are better solutions.

So taking out an additional €50k loan to make the building savings contract ready for allocation seems pretty pointless to me.

In general, I don't find either of the two options that good.

Before buying, an expert should possibly be consulted.

I think this here:

I simply don't know what to do anymore, maybe we should just diligently save for 10/15 years first, but we have now found such a nice house for ourselves.

would be the right decision. You basically couldn't even pay the incidental acquisition costs out of your own pocket here.

In 10-15 years there will also be nice houses. ;)

There will also be nice houses in 10-15 years. ;)

My opinion too :) I won’t start the discussion here about the meaningfulness of committing to a property in young and hopefully still stormy years (also having to accept strained interest rates here without equity) ;)

Also my opinion :) I won’t start the discussion here about the point of tying yourself to a property in your young and hopefully still stormy years (also having to accept strained interest rates here without equity) ;)

Absolutely right. Better to save for another 5 - 10 years and enjoy life!!!