Evaluation of Real Estate Financing for Existing Property

Off to the loan broker.

That’s what I did first.
First, through my bank (DKB), through DKB Grund. They apparently rely on a large number of banks.

There, the problem was the equity. In the end, there was only one single offer: the local savings bank. So I went straight there and got better terms than through the broker.

Afterwards, I went to Deutsche Vermögensberatung, where I have been customers for years. There, the problem was also the equity and an ongoing car financing. The only offer was then with Deutsche Bank with the high interest rates for the renovation.

So far, the savings bank had the best offer. Since our equity is only enough for the incidental purchase costs, we just have to accept it that way. Surely, the offer is not the best, but given the circumstances, it’s quite okay.

The special repayment option is important not only in the case of special repayments but also useful in the event of a potentially necessary early repayment of the loan. The option must be taken into account by the bank when calculating a [Vorfälligkeitsentschädigung].

One thing upfront: this all sounds 100% safe. If you like the house and feel at home there: go for it! Financially rock solid and easy to manage.

We are in the Saxony-Anhalt province and can take over this very house.

Key data:
Living space: 206 sqm
Plot: 580 sqm

If I understood correctly, the house from 2002 with 206 sqm living space and the plot costs 200,000 euros. Most people here will be amazed :D

Location (village, right on the forest, next major center 8 km away) and size also make it easily resellable if necessary.

And here we come to the crux. No one has a crystal ball. But while property prices across Germany are generally forecasted to rise at more or less steep rates, you are in an area where experts predict falling prices. Not a problem if you use it yourself. But then you really have to save money very disciplined over the next 10 years to avoid taking on much follow-up financing. That shouldn’t be a problem either, because:

We have a household net income of about 6,250 euros including child benefit (1 child)

That makes you part of the money elite in the Saxony-Anhalt province ;) And if you currently have little equity, the situation will definitely be better in 10 years. I also wouldn’t fix the interest rate for more than 10 years at your income level.

So if you see yourselves there for the long term: go for it!

But it’s not the safe investment like in other parts of Germany. You probably know the price level better in your area. Still, it seems cheap to me for an 18-year-old house...

Thank you for your assessment!

At the moment, prices here only know one direction. Steeply upwards. We are also getting a highway connection here to the Baltic Sea and southwards towards Halle / Leipzig / Dresden.

Presumably, it will be possible to sell without taking a big loss. Nobody can know for sure. In principle, it is supposed to be for us. So :)

Not necessarily nouveau riche. But I am aware that we are above the average for local standards. But my wife is a tenured teacher and I work in a Western corporation. That works out.

And you calculated correctly ;)

To conclude briefly: The loan agreement will be signed next week. Thanks to everyone who gave their assessment!