Financing property purchase and modernization

2019-06-25 17:23:41

Thank you very much for the previous advice.

I just looked at the repayment calculator for a KfW loan for real estate financing; in my case, an interest rate of 0.75% would be indicated for a loan of 40 or 50K € for 5 years. Is it realistic that one could also get that in my case? What would speak against it? That would then mean I have 50 or 40K € again that I could prove as equity for a modernization.

That is not equity; it must be passed through by the bank that provides the main loan and is recorded as an obligation with them.

2019-06-25 19:53:56

The fact is that I do not have less equity through the loan than if I finance the property entirely with my own funds, but funds over which I can flexibly dispose during the modernization.

2019-06-25 20:14:11

The fact is that through the loan I do not have less equity than if I were to finance the property entirely with my own funds, but rather funds over which I can flexibly dispose during the modernization.

Yes, but the bank does not care about that and gives you poor terms. You could have a million just lying around. No one at the bank cares. The value increases from subsequent modernization are probably not taken into account either, because the bank has no security that you will actually carry them out. At my bank: ALWAYS prove equity and use it at the beginning, otherwise the financing will not be closed.

2019-06-25 20:15:31

The fact is that I do not have less equity because of the loan than if I were to finance the property entirely with my own funds, but rather funds over which I can flexibly dispose during the modernization.

In summary: You borrow money instead of using your own. That is the basic concept of any loan.

2019-06-25 20:25:07

The fact is that I do not have less equity through the loan than if I were to finance the property entirely with my own funds, but I have funds over which I can flexibly dispose during the modernization.

To what extent do you believe you can dispose of the funds flexibly? How do you define flexible in this context?

2019-06-25 20:46:24

Summarized: You borrow money instead of using your own. That is the basic concept of any loan

Yes, but normally I wouldn't borrow someone else's money if I still had enough of my own, except if I get much better interest conditions for my money than I have to pay for the borrowed one.

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Financing property purchase and modernization

Noelmaxim

shadowman

nordanney

Tassimat

Noelmaxim

shadowman