aksehir
2024-10-27 09:21:18
- #1
Hello everyone,
we have finally found a property and now it’s about financing the project. We have excellent creditworthiness, so we can choose the bank. Unfortunately, due to time constraints (new baby), it is not possible to enter much more data, so I am taking the pragmatic approach:
Property price €275,000
Additional purchase costs €25,000
Modernization costs €200,000
Half of the modernization costs will be paid from equity
Additional purchase costs will also be paid from equity
Financing requirement €375,000
Offers
Bank A
3.25% nominal interest, 3.35% effective
1.5% repayment
15 years fixed interest rate
Modernization budget: €194,000
Equity use €89,000
[Muskelhypothek] €30,000
Bank B PSD Bank
3.35% nominal interest, 3.42% effective
1.5% repayment
20 years fixed interest rate
Modernization budget: €194,000
Equity use €89,000
[Muskelhypothek] €30,000
Bank C Sparkasse
3.39% nominal interest, 3.46% effective
1.5% repayment
15 years fixed interest rate
Modernization budget: €194,000
Equity use €89,000
[Muskelhypothek] €30,000
Bank D (House bank Sparkasse)
€275,000 Loan 1 with 3.51% nominal interest and 3.58% effective
20 years fixed interest rate
Modernization budget €175,000
€100,000 KfW loan with 3.34% nominal interest and 3.39% effective
10 years fixed interest rate KfW
Here in total €100,000 equity use
2% repayment i
With PSD Bank, we have to prove 85% of the budget with invoices, which would generally not be a problem. However, we also plan to do part of the modernization ourselves and with my family (craftsmen), but not everything. The majority will be done with invoices. PSD wants an architect’s statement in advance. Now we wonder whether we have to stick exactly to the budget. If the architect states that the windows cost €50,000 but they actually cost €40,000 or €60,000, will there be trouble with PSD? We don’t know this bank and are afraid there might be communication difficulties.
With the house bank, we do not have to show any invoices at all and could theoretically do everything ourselves. We would not have to tap into our equity first, but could initially finance the modernization with borrowed capital. We could also pay only the interest in the first year (double burden due to rent) and would have a monthly buffer during the modernization period.
After 10 years, however, the KfW would be finished and still have a huge remaining debt. Also, in principle, the monthly burden would be higher with this option due to 2% repayment.
2% repayment would also be our goal, but we would rather use special repayments (13th salary etc.) since we just had a baby, so having a bit of a buffer for the first years wouldn’t be so bad.
By the way, we would not use our entire equity for the project and would have enough buffer and emergency funds for unforeseen things in all variants.
We are basically the security type. Intuitively, we would rather accept the offer from the house bank. But we wonder why pay more interest and higher monthly charges if it can be done differently?
PSD Bank gives us a bad feeling for whatever reason.
With the house bank, we would have more freedom, but would also be forced to pay more (and meanwhile save money for the KfW follow-up financing), so we don’t know if the pressure would be greater there.
What do you say? Also about the fixed interest term? Is 20 years good or are 15 years enough? Does anyone have experience with PSD Bank? What is this [Muskelhypothek]? The advisor from Interhyp just inserted it.
Thanks for your help!
we have finally found a property and now it’s about financing the project. We have excellent creditworthiness, so we can choose the bank. Unfortunately, due to time constraints (new baby), it is not possible to enter much more data, so I am taking the pragmatic approach:
Property price €275,000
Additional purchase costs €25,000
Modernization costs €200,000
Half of the modernization costs will be paid from equity
Additional purchase costs will also be paid from equity
Financing requirement €375,000
Offers
Bank A
3.25% nominal interest, 3.35% effective
1.5% repayment
15 years fixed interest rate
Modernization budget: €194,000
Equity use €89,000
[Muskelhypothek] €30,000
Bank B PSD Bank
3.35% nominal interest, 3.42% effective
1.5% repayment
20 years fixed interest rate
Modernization budget: €194,000
Equity use €89,000
[Muskelhypothek] €30,000
Bank C Sparkasse
3.39% nominal interest, 3.46% effective
1.5% repayment
15 years fixed interest rate
Modernization budget: €194,000
Equity use €89,000
[Muskelhypothek] €30,000
Bank D (House bank Sparkasse)
€275,000 Loan 1 with 3.51% nominal interest and 3.58% effective
20 years fixed interest rate
Modernization budget €175,000
€100,000 KfW loan with 3.34% nominal interest and 3.39% effective
10 years fixed interest rate KfW
Here in total €100,000 equity use
2% repayment i
With PSD Bank, we have to prove 85% of the budget with invoices, which would generally not be a problem. However, we also plan to do part of the modernization ourselves and with my family (craftsmen), but not everything. The majority will be done with invoices. PSD wants an architect’s statement in advance. Now we wonder whether we have to stick exactly to the budget. If the architect states that the windows cost €50,000 but they actually cost €40,000 or €60,000, will there be trouble with PSD? We don’t know this bank and are afraid there might be communication difficulties.
With the house bank, we do not have to show any invoices at all and could theoretically do everything ourselves. We would not have to tap into our equity first, but could initially finance the modernization with borrowed capital. We could also pay only the interest in the first year (double burden due to rent) and would have a monthly buffer during the modernization period.
After 10 years, however, the KfW would be finished and still have a huge remaining debt. Also, in principle, the monthly burden would be higher with this option due to 2% repayment.
2% repayment would also be our goal, but we would rather use special repayments (13th salary etc.) since we just had a baby, so having a bit of a buffer for the first years wouldn’t be so bad.
By the way, we would not use our entire equity for the project and would have enough buffer and emergency funds for unforeseen things in all variants.
We are basically the security type. Intuitively, we would rather accept the offer from the house bank. But we wonder why pay more interest and higher monthly charges if it can be done differently?
PSD Bank gives us a bad feeling for whatever reason.
With the house bank, we would have more freedom, but would also be forced to pay more (and meanwhile save money for the KfW follow-up financing), so we don’t know if the pressure would be greater there.
What do you say? Also about the fixed interest term? Is 20 years good or are 15 years enough? Does anyone have experience with PSD Bank? What is this [Muskelhypothek]? The advisor from Interhyp just inserted it.
Thanks for your help!