Financing model - how to proceed?

Hello everyone,

we are currently in the planning phase for a house renovation.

The situation is as follows:
I am buying the house from my parents for €125,000 (market value approx. €270,000).
I want to renovate the house from the ground up. Roughly estimated costs amount to a further €125,000 - €130,000.

About us:
Both in permanent employment.
Net income A: €1900, at the company for 5 years
Net income B: €1500, at the company for 10 years
Equity: €30,000

Financing amount: €225,000 - I consider this realistic, what do you think? Also considering that about half goes to my parents, so in case of emergency (unemployment or similar) there is some room to maneuver.

For the financing, of course, a rough renovation cost estimate is not enough for me (probably not for the bank either).
Should I now go ahead and request specific quotes for all trades and get offers? Or what is the normal procedure here?

Do you have any further tips for the initial/planning phase?

Hello,

I personally consider €3,400 net for 225k to be tight even if a bank is financing it. How about children? Is there more to come and does someone have to go part-time?

Otherwise, the market price is the purchase price. Within the family, the opposite must be proven. Banks usually finance 50% of the renovation / refurbishment costs. In this constellation, you need to inquire more precisely. For extensive refurbishment, a sketch and a few numbers are not enough. At €125-130k you should already get offers to present it convincingly. You don't have to work with the craftsman.

You should have this financing checked for feasibility first with the house bank. I would already inquire about that without obtaining the exact offers. They will tell you if it would be feasible.

I see it differently. With a net income of 3400, I consider 225k to be more than feasible. It’s a question of the monthly rate and the term.

Proving the market value is not a big problem. The €130,000 conversion cost is also a very rough estimate including roofing and a €10,000 buffer. But as of now, I cannot really assess whether the roof needs to be replaced. (I almost suspect not, although if someone tells me it needs to be done within the next 2 years, I would prefer to do it earlier.)

Morning

without knowing the building and your skills now but
You cannot say whether the roof needs to be renewed, yet you dare to estimate the renovation costs at €130,000 and then plan a buffer of only €10,000.
First, you should determine the scope and costs of a renovation and adjust the buffer according to the quality of this determination.

Olli

I consider it quite feasible. We have far, far more credit with a similar starting position