Financing - Equity / Debt ratio - Optimal structure?

Hello everyone,

for us, the time has come and we will buy the house from the parents-in-law (about 25km north of Stuttgart).

Built in 2004, 140 sqm living space, 131 sqm plot, garage, facade newly painted, no garden (but large terrace),

This week we have financing talks with our 2 house banks and two financing brokers.

The following constellation is given:

House price: 350,000€
Including incidental costs (2%): 357,000€
Capital needed for new kitchen, tiles, etc.: 30,000€

Total needed: 387,000€

Equity: 85,000€ in the bank (jointly)
Stocks: 50,000€

We plan to have the house paid off in about 20 years.

How much equity would you use? 10%? 20%?
Fixed interest period 10, 15, 20 years?

Actually, wouldn't it be most sensible to use as little equity as possible and rather invest the excess equity in the stock market, since returns > interest, right?

At the bank, the gentleman said that the KFW loan (100,000) with 0.84% is no longer really worthwhile because it makes you inflexible (no special repayments, 1 year interest-only period) and that most people currently don’t take it anymore. Do you see it that way, too?

At the first bank, the following conditions were offered with 70k equity deployment:

10 years fixed interest: 0.78%
15 years fixed interest: 0.98%
5% special repayment
Annual repayment corridor (repayment can be adjusted from 3-6%)

We would be very grateful for tips, after all, it’s a life decision.

At the price in the Stuttgart catchment area, this is anything but a life decision. With that amount, you are rather at the lower end of financing here. So I am a bit risk-taking and say 10 years fixed interest and repay as much as possible. Especially in the first years, special repayments save real money. Of course, you can also proceed completely differently and repay minimally, let inflation and the price increases in the market work for you, and consistently (!) invest the surplus money over 20 years. The question is, how is your portfolio at the moment you want to pay off the loan? A third option would be to repay moderately over a long term so that you are debt-free at retirement. Besides the maintenance reserve and an emergency fund, build up equity again and invest in other properties. However, this requires discipline and sufficient income.

One question. 7k additional costs? Is no real estate transfer tax incurred when buying within the family?

One question. 7k additional costs? Is there no real estate transfer tax when buying within the family?

Yes. No real estate transfer tax for acquisition in a direct line.

Not in a direct line. Although strictly speaking, it should first only be sold to the spouse and he/she would then have to sell 50% to the TE. But I don't know if that is the case in practice...

saralina was faster...

Not in a direct line. Although strictly speaking, it should first only be sold to the spouse, and he/she would then have to sell 50% to the TE. But I don't know if that's how it works in practice...

Yep, there are two purchase contracts, which can probably be notarized in one deed. But that's routine work for a notary. P.S. You can also do without an AV and save money.