Follow-up financing or refinancing (Kfw) "retain"

Our financing is based on two KFW loans (each 50,000) and a construction loan (approx. 100,000). Everything expires at the beginning of 2023. Within 2 months.

We then still have about €40,000 each on the Kfws, which we would refinance through our bank. For the rest of the construction loan (approx. 50,000), we now have an offer for a follow-up financing (forward): either for 5 or 10 years. 1% or 1.07% interest. With 5 years, there would still be 25,000 remaining. It would actually be nonsense to choose that one.

However: We could roughly repay a loan from own funds.

What is best to keep now? What should be continued or concluded?

Is there any disadvantage to follow-up financing or new financing? It would feel like nonsense to refinance a 40,000 one and take out follow-up financing for the 50,000 one. Or not? We are real dummies in this area :rolleyes:

Do you bankers have any advice?

Hi, no matter what you call it from a marketing perspective, it is all a follow-up financing since your fixed interest rate period is ending ;)

You should be careful that nothing goes wrong at the appointment. It is best recommended:

a- To take the follow-up financing with the existing bank. Usually, the house banks make little "effort" with the conditions
b- To combine the loans into one credit and then request a new/follow-up financing.

I think you will rather choose Part B, usually one still repays a few euros. Do you know the final balances at the refinancing date?

Hello Yvonne,

Just as we almost built together, so goes the financing :) My KFW loan also expires in January 2023.

Does the main loan also have a 10-year fixed interest period? The KFW itself does not extend your KFW loans, but this is handled by the bank that has been passing it on so far. If I were you, I would also try to consolidate into 1 loan, possibly with different payout times. For amounts over €50K, it usually becomes cheaper. Under no circumstances would I now only finalize the €50K forward for the main loan. Besides the current bank, I would also get offers from other banks/intermediaries.

Whether you then use your own capital or for example rather try to invest it with some risk is hard to advise, because everyone has a different risk appetite. Despite the construction financing, I still try to stay liquid for emergencies (unemployment benefits/disability insurance etc.) and therefore have invested part in ETFs. At the same time, there is always additional repayment.

Musketier

So it is ... like with you.

Do you know the final balances at the refinancing date?

You mean the remaining amounts? yes, as already said: both Kfw loans between 35000 and 40000. A total of 71000€. The main loan 52000€. All rounded.
Cash for rounding off is available.

b- Combine the loans into one credit and then request a new/follow-up financing.

Yes, that is my question. Ing-Diba is now making an offer and has already called us twice so that we conclude the forward loan for the main loan - the offer should be accepted by us by 07/24 if we get a "0.xy%" bonus. The bonus does not really matter to us considering the interest rates and the fact that we also want to "refinance" these Kfw loans. We would like everything in one... for that we would have to submit all documents again like salary statements, site plan, etc. I have those documents.
We also do not value a forward loan, which only applies now to the main loan.

Under no circumstances would I now conclude only the 50k€ forward loan for the main loan.

Thanks. That's my thinking too.

Aside from the current bank, I would also get offers from other banks/brokers.

hm... yes, we can do that. If we actually ignore the offer from Ing-Diba regarding the forward loan now, then we probably have enough time.

The question is whether we are really thinking correctly by ignoring the "offer" of the forward loan.

Overall, I read from you: wait and combine?!

usually you still pay off a few euros.

My husband will receive quite a lot of money in two years (company pension). With that we could pay off about a third of the entire remaining debt.

How are you doing it, ?

Do you bankers know the advice?

Consolidate everything at your bank (or a new bank). The KfW does not offer good follow-up financing (if you had a term of more than 10 years). It's all the same as with any other bank. Usually not worthwhile.

We also do not value a forward, which currently only applies to the main loan.

Then you will have problems consolidating everything.

Overall I read from you: wait and consolidate?!

Consolidate yes, but wait? With the low interest rates, you don't lose and always win ;)

My husband will receive quite a lot of money in two years (company pension). With that, we could pay off about 1/3 of the entire remaining debt.

Then take out a suitable loan and repay the rest from the company pension.

Yes to consolidation, but wait? With the low interest rates you don’t lose and always win ;)

By waiting I mean that I ignore the current offer, get the KfW documents for the takeover after 10 years sorted out and then, for example in October, get a total offer. Is this the way for us?

Then take out a suitable loan and pay off the rest from the company pension.

Thank you.