Financing plan for condominium

Hello everyone,

my head is spinning (not only because of the heat), I hope someone has a cooling tip for us.

We are a family of six and have been offered a nice condominium. It feels more like an end-of-terrace house, as it has a completely separate entrance, only the basement is shared with the other 3 units. A few key facts:

120 sqm 5 rooms kitchen bathroom
2 floors
123 sqm plot + approx. 150 sqm garden along the entire length of the house - however, this is leased for life for 30€
Built in 1946
Complete insulation all around (styrofoam) about 10-12 years ago, including basement ceiling
Shortly after, gas, water, and electrical lines were renewed
Gas central heating, one gas boiler for all; billing via "tubes"
All floors are like new, entrance area with vestibule new, base newly sealed
All windows are double-glazed and made of plastic
The entire apartment is in a condition where you could simply move in.

It should cost 125,000 EUR, without a realtor. Now to our circumstances.

Our total income is 3300 euros. Cold rent 496€, car loan over 250€ and a consumer loan until autumn 2014 over 150€. I have a permanent position in the public sector, my wife works on a 450€ basis - from January again part-time. Unfortunately, we have no equity.

I was at the Sparkasse and Wüstenrot, both rejected a loan without equity. Dr. Klein offers me the following financing:

DSL Bank

615€ monthly
61,000 EUR as an annuity loan at 3.74% interest for 15 years fixed rate
50,000 EUR from KFW at general conditions
23,000 EUR as a private loan at 8.48% (equity simulation?!) 20 years term, 15 years fixed rate
Calculated term without special repayments 42 years :-/

Alternatively a Riester loan with the same amounts, Riester allowances go into the 61,000 (then at 3.20%),
installment decreases to 588€.
Calculated term 28 years.

Well, here I am. To be honest, I’m a bit afraid, some agree with me - others don’t.
By the way, I am 32, my wife 30.

Thank you in advance for taking the time.

I can't say anything about the financing... nevertheless, I would get an appraiser for the house, built in 1946, and [Gemeinschaftseigentum] is still a bit of an issue....

An expert opinion certainly wouldn’t hurt.

I find the rate of €615 very tight, but the advisor will have done it correctly. I hope so.

You are aware that you are paying over €23,000 in interest on the private loan? So about €46,000 in total.

In addition, interest rate risk after 10 years with the KfW (~€29,000), 15 years (~€49,000 + €10,000). This at least partly disappears with the Riester option for the regular loan.

My tip: Leave it, save, save, save and strike in 5-10 years... real estate will become cheaper again. Don’t be tempted by the low interest rates (8.48%).

Oh, so you have sufficiently informed yourself about the Riester story?

I am definitely no hero when it comes to financing questions, but even I would N E V E R finance with Riester. My Dr. Klein agent once explained it to me. Since then, all alarm bells ring in my head whenever I even hear Riester (although local banks always tried to sweeten it for me because of 3 children and so on)... but to each their own.

Can only agree with backbone: Save SaveSave! I've been messing around for months now and in the end everyone screws you over (starting with the authorities, ending with the banks) but with full financing you alone pay for your creditor's Benz... and his winter tires!