Decision: Co-finance parents' house or build equity?

I might consider playing through another thought.

If neither of you brothers were to live in the house in the future, I would consider selling it during the lifetime of the father and the currently strong seller's market. Since the father is also getting older, possibly buying a barrier-free apartment. The proceeds from the house would release some capital, which can be used as a down payment.

I expressed this thought because we did it the same way in the situation. Sold the house (160sqm), moved dad into a smaller 65sqm new apartment. Dad happy (less work, no longer "completely alone" in a big house, more everyday contact with neighbors) children happy :)

Whereby with us, the sale of the house paid for a large part of the apartment and the rest can be paid with a low monthly rate from the pension.

Wow, thanks for your answers and suggestions. I need to let it all sink in first. I spoke with my brother yesterday; he is supposed to think about it based on your ideas. I will keep you updated.

- In itself, a good idea, but my father is very attached to the house and values the freedom associated with it – even though there might be financially more sensible options. I have already touched on this topic in the past, but I fear it would require a lot of persuasion.

- Oh, do we have to take care of the follow-up financing now? The current loan still runs until February 2017. Or are you referring to the new credit check?

Questions
1) (...) Or does the house count as equity capital with about 70,000 euros?

Only if you alone / you together with your brother, e.g. as a GbR, are registered as owners in the land register, e.g. as a gift, which may also be subject to taxation. For example, a right of residence could also be registered; then he does not have to "move out."

Only with registration in the land register are you or the GbR the legal "owners" (= equity capital).

: Yes. Because you wrote your father is now 67 and retired and also mentioned that the pension is not really high. Furthermore, there are still 130,000 outstanding. All factors that bankers, especially since 03/21, do not get excited about.

Especially because the value of the house was not estimated by the bank or an appraiser.

Does the bank have to make an extension offer to the borrower? According to Section 492a of the German Civil Code (Building Code), the bank is obliged to inform the customer three months before the end of the fixed interest period whether it is willing to continue the financing. If yes, the interest rate at which the loan will be continued must be stated. However, this can also be the variable interest rate, which is hardly relevant in practice.

And if you only start dealing with it in December, time becomes tight.