Financing offer for a core renovation

Hello everyone,

after reading the posts for a while, I would now like to ask for your opinion on our project:

The following situation:

House purchase approx. 60,000 (already bought and all additional costs paid, without a loan)
Core renovation approx. 300,000€ (all offers available, buffer available)
Equity approx. 60,000€
Thus financing amount approx. 240,000€
Monthly rate 1,200€

We currently have an offer on the table, which looks as follows:

First part:
100,000€ annuity loan with an interest rate fixed for 10 years (nominal interest 1.3%, effective annual interest 1.34%)
Payments p.m. 585 €
5% special repayment p.a. possible

Loan costs first part total according to bank offer: 9,150€ after 10 years, afterwards unknown interest for the follow-up financing. Important: information without special repayment, here we could theoretically pay up to 5,000€ p.a.

Second part:
140,000 TA loan with an interest rate fixed for 10 years, fixed nominal interest rate 0.75% and fixed bedroom 2.15% from the 10th year.

Total loan costs second part according to bank offer: 20,534€ (sum over 20 years)

So I would have fairly estimable total costs of the two loans in total of ~29,700€

!The unknown is clear: 38,000€ follow-up financing of the annuity loan if no special repayment has been made until then (calculating with >2,000€ special repayment per year).

For me, the best offer so far. What do you think?

Looking forward to answers!

MeisterBobb

Why a TA loan?

I don’t understand either. You started the project with more alcohol 30% equity and the first part sounds good. There must be a better alternative? What about KFW? There are also building blocks there. But regarding the planned remaining debt: that’s in the range of a consumer loan and would worry me little.

Thank you for your answers!

So KFW is out, not an option. We are not remodeling according to KFW.

We had been offered an annuity loan from another bank. Overall worse in my opinion. The loan consists of two parts,
First part 10 years / €75k at 0.95% nominal interest / installment approx. €660 p.m.

Second part 20 years / €165k at 1.59% nominal interest / installment approx. €540 p.m. —> when the first part is paid off (10 years) the installment will increase to €1,200.

In this case, the total costs without special repayment are about €35k after 15 years fixed interest period, then we still have an outstanding debt of €59k which will need refinancing.

Best regards,

MeisterBobb

Hello,

KP 60k, renovation 300k. This exceeds the "value" of the house by 5 times. I wouldn’t haggle over the conditions after the decimal point but rather look at how the payment modalities are. Don’t want a situation at the end of the day where a lot is done through personal effort and the bank "acts up".

Well, that doesn't mean anything at first. First of all, the property can already be worth a lot. In addition, banks take into account the renovation measures. That's what the [Aufstellung] is for.

KfW also exists without an achievable standard. That is €50,000. In addition, measures are also supported with a repayment grant. Heating system, windows, ceiling insulation are buzzwords here. The necessary energy consultant is also funded.

Please inform yourself beforehand. That is cold hard cash.

I read that you are thinking about the follow-up financing. I don't find €60,000 that much in your case. After all, you have already built up more than €120,000 in equity.