Dream house found by chance. Is financing possible?

Hello everyone,

we are a family of three from the center of Baden Württemberg. What is it about? We currently live in a semi-detached house that we own. The other half is currently being sold. For fun, we looked at the offer on Immoscout and by chance stumbled upon our absolute dream property. However, the price is quite ambitious. Now I just wanted to get an assessment from a third party to do a reality check. Here are the basic conditions:

[*]Who are you?

Family of three living in the greater Reutlingen/Tübingen area.

[*]How old are you?

35/33 and a 9-month-old boy.

[*]Are there children?

Yep :)

[*]Are more children planned?

possibly one more

[*]What do you do professionally?

He is an engineer, she is a specialist doctor, both permanently employed.

[*]How many hours do you work?

He full-time 40h, she part-time 26h (again from February :))

Income and asset situation:

[*]What income do you have (gross/net)?

approx. 12000 / 7300 euros

[*]How much equity do you have?

Now it gets exciting. We currently live in a semi-detached house which we inherited and then completely renovated in 2019. That means everything, really everything new. Even a complete half-timbered wall was replaced. Unfortunately, we decided on a gas boiler back then. That is the only negative point :). The complete renovation was credit-financed at the time with an amount of 390k euros, now about 330k still outstanding. The bank currently estimates the value of the semi-detached house at about 670k euros. The house is located 500m from the headquarters of a large corporation (the husband’s employer) and will therefore presumably be sold quickly. So, I would now shamelessly call the difference between the outstanding loan amount and the house value equity. Additionally, there would still be 25k building savings credit with a 50k loan.

As described above, the house we have been in love with for a long time is actually being sold now. (House with open gallery, great garden, and in absolute prime view location). Unfortunately, the price of 950k is quite, quite steep.
Now to the actual question. We are anything but finance junkies and need a little help to see if and what is even possible here.

Can we transfer our loans to the other property and thus take advantage of the super low interest rates (under 1.9 percent with a 30-year fixed rate) so that we only have to finance the difference with a new loan? How does the transition from one credit-financed property to another work? In other words, can the professionals here help us bring light into the darkness? We know that the monthly burden will increase, possibly significantly. We can also live well with a reasoned answer and the conclusion "forget about it quickly." Of course, it would be nicer if something else came out.

Thanks in advance for all answers, if details are missing they can of course be provided.
Best regards
mozelcaer

Can we transfer our loans to the other property and thus take advantage of the super low interest rates (below 1.9 percent with a 30-year fixed interest period) so that we only have to refinance the difference amount? How does the transition from one loan-financed property to another work? In other words, can the professionals here help us shed some light on this? We know that the monthly burden will increase, possibly significantly. We can also live well with a well-founded answer and the conclusion "forget it quickly." Of course, it would be nicer if something else comes out of it.

The transfer is called a "Pfandtausch" in technical jargon. It usually works with almost any bank – but it doesn’t have to if the bank is stubborn. However, since buying and selling will not take place simultaneously, an interim financing of the sales proceeds is needed. Just like for the subordinate residual financing (= new loan, since the new property is more expensive), you should talk to your bank. Another bank will not play along with this game. Just calculate with 4.5-5% interest for a 10-year fixed interest period. 1% repayment is conceivable; more does not have to be with this interest rate (of course, you can repay more if you want). What does this cost in the end? - Purchase price property T€ 950 ==> Incidental purchase costs through equity / building society loan (350€ monthly installment?) ==> Financing requirement of T€ 610, assuming your previous house can be sold as expected (but I would not assume that so that you are not disappointed in the end and need even more loans) ==> divided into old loan T€ 330 and new loan T€ 280 ==> T€ 280 currently costs about 1,300€ per month Now you have to calculate for yourselves whether what remains is enough for your life. So old installment, building society contract installment + new installment. However, I would strongly assume that this is easily enough (I assumed 5% annuity for the old loan = approx. 1,600€ installment and thus a total new burden of a maximum of 3,500€. If you cannot live on almost 4,000€ per month, you don’t have an income problem but an expense problem ;-) P.S. With the income and the low old installment, I ask myself while thinking where the money has gone since 2019? I accept parental leave, but the three years before that? Actually, there is too little equity for that...

P.S. With the income and the low retirement rate, I am wondering where the money has gone since 2019? I accept parental leave, but the three years before that? There is actually too little equity for that...

Probably in the first real estate loan? Paying off 60k in 2-3 years is quite something.

Probably on the first mortgage? Paying off 60k in 2-3 years is quite a feat.

I'll be mean ;-)
- 2019 major renovation
- today 2023 60k paid off = 15k p.a. = 1,250€ per month
- net income 7,300€ until the end of 2022 (then parental leave)
- question: How do you spend 4,400€ every month for years (interest 600€ monthly)

Very simplified and malicious. If it didn't work out with the salary in the past, it certainly won't work now...

But the OP will surely respond. It can't be that bad.

I find the leap already quite … naively thought: let’s see what the neighbor asks for his house and I want to buy our then dream house because it is for sale.

have been in love for a long time. (House with open gallery, great garden and in an absolutely top view location).

Reminds me of the situation, just moved in with the 3-year boyfriend and now finding out that the crush from back then, whom you admired for years, is single again. … How do you best arrange the breakup?
And the reasons: great eyes, good taste, good family background…

Now it’s getting exciting. We currently live in a semi-detached house that we inherited and then completely renovated in 2019.

Isn’t there some passion involved that you wouldn’t actually trade for the rest of the world?

Decided on a gas boiler. That’s the only negative point

Well then. I wouldn’t waste a thought on past dreams and crushes that are only expensive without any down-to-earth value anyway.

I also believe that this is a size too big and you have not shown so far that you can save money. Pfandtausch does not work with the bank from 1.9% to 4.5-5%. If you get the Bauspardarlehen without land register entry, the 50,000€ are not even enough for the incidental costs.