Curious financing idea

It gives us at all the possibility to get a loan. I don't know any bank or similar institution that finances without significant equity. Based on the repayment rate, we can afford to take out the 430k, even with reserves.

That means I would have to tell the bank that in the financing requirement of 480k, the 50k that we actually want to give to the father-in-law is included. If I don't say that, it would be fraud, right? Or does the bank not care as long as I repay the loan properly every month?

I'm sorry if I seem so confused. I just don't want to approach anything cluelessly.

That means I would have to tell the bank that within the 480k financing requirement, we've actually included 50k that we would want to give to the father-in-law.

That somehow doesn't make any sense. The bank only provides the loan money for the house. Invoice against money, no blank payout for anything else.

The bank knows the plan and is aware of the private loan from the father-in-law. but thinks that 100k renovation costs are targeted

The plan falls apart at the latest when the bank wants the equity = money from the father-in-law in advance and finds out after real 45k euros that you still have a loan outstanding with the bank, but no longer submit renovation invoices. These are required for the disbursement.

That means I would have to tell the bank that in the financing requirement of 480k, we actually want to pay 50k to the father-in-law.

By doing this, you are practically telling the bank that you are financing without equity. What is the difference to not getting any money from the father-in-law at all? The thing is, that the bank would receive the father-in-law’s money as equity upon purchase price payment and on the same day repay this "equity" with a loan. Total nonsense.

That means I would have to tell the bank that in the 480k financing requirement it is assumed that we would actually want to give 50k to the father-in-law. If I don't say that, it would be fraud, right? Or does the bank not care as long as I repay the loan to them properly every month?

Banks require invoices to be presented for the disbursement of amounts from the loan!

There are house banks that do not require proof for very good customers (several properties financed with one and the same bank). However, that does not seem to be the case.

No matter how you twist and turn it, it remains a 105% financing without equity or with a lot of EL cleverly fudged less than or equal to 100%.

ok. then that's completely nonsense. I wasn't aware that they require invoices there, I don't know that from my parents. Probably for that reason.

Ok, well, you can't get such financing (105% without equity) from any bank, I think.

How about if we let his parents live in the apartment of the two-family house to pay off the private loan? That should work, right? Free housing, since we don't see any money, but pay off the loan?

Ok, well you probably don't get such a financing (105% without equity) from any bank, I think.

I am not claiming that you won't get the loan, there are definitely banks that support such financing. But it remains unhealthy. 480k€ with 4100€ net income is simply crazy and the conditions are then horrible compared to financing with real equity.