Financing offer for 120% financing

Hello everyone,

I am new to the forum and would really appreciate your help Thanks in advance!

Currently, my wife and I want to buy an apartment, which we are getting significantly below market value and without additional broker fees.

I have now received an offer for the loan and would be very happy to hear your opinion about it!
- Loan-to-value ratio: 120%
- Purchase price of the property: €92,000
- Financing requirement: €110,000
- Equity: €0

Partial loans (Bank + KFW 124)

Bank -
Loan amount: €60,000
Fixed interest period: 15 years
Nominal interest rate: 1.98%
Effective annual interest rate: 2.02%

KfW -
Loan amount: €50,000
Fixed interest period: 10 years
Nominal interest rate: 0.85%
Effective annual interest rate: 0.88%

Blended interest rate (effective): 1.50%

Is this a good and fair offer?

Best regards,
Brzezie

That sounds like an Anglican financing model, which relies on the appreciation of the property. There are several reasons for lacking equity; here are the two most common:

1. Income has not been sufficient for a savings rate so far. So at least one parameter would have to fundamentally change to approach the project solidly: Either a major cost factor is eliminated or a positive income development changes the income.

2. Spending discipline is not very pronounced. Then you would have to change something.

What should I advise there? The interest rates look OK.

Well, do you have a choice? You won't get a 1aaas financing. Is it an offer or a concrete commitment? What are the incomes etc.

Which bank is that supposed to be?

1} What does your net income look like?
2) Any children?
3) Loan obligations? Currencies?
4) In which city is the purchase being made?

That sounds like an Anglican financing model, where the property’s value appreciation is taken into account.
There are several reasons for missing equity, here are the two most common:

1. The income has so far not been enough for a savings rate. So at least one parameter would have to fundamentally change in order to approach the project soundly: Either a major cost factor drops away or a positive income development changes the income.

2. The spending discipline is not very pronounced. Then you would have to change something.

What should I advise? The interest rates look OK.

The apartment currently has a market value of about €120,000.

We have consciously decided not to invest any equity because we currently need the money for another project.
So it is neither due to income nor spending discipline.

Well, do you have a choice? You won’t get a 1aaas financing. Is it an offer or a concrete commitment? What about the incomes, etc.?

An offer. See below for the income.

Which bank is it supposed to be?

1} What does your net income look like?
2) Any children?
3) Credit burdens? Valuten?
4) In which city is the purchase?

1. Currently about €4200 net (2 persons)
2. No, but planned in the future
3. Remaining debt of about €3500
4. xxxx

The apartment currently has a market value of approximately €120,000.

We have consciously decided not to invest any equity, as we currently need the money for another project.
Therefore, it is neither due to income nor spending discipline



An offer. See income below.



1. Currently approximately €4200 net (2 persons)
2. No, but planned for the future
3. Remaining debt of approximately €3500
4. Neuss

The market price is always the purchase price. Period.

The only exception I know of is sales within the family. Thus, the conditions should be OK.

Income fits as well