Follow-up financing - under what conditions?

Hello! We bought and renovated our old building in 2017. The roof now needs to be replaced for various reasons. The roofer estimates €30,000-40,000. In 2017, we took out €239,000 with Ing-Diba. We pay €1,050 monthly, which is 3% repayment. Financed back then with 2.3% interest and a 15-year fixed interest period. Today we have a significantly better financial situation than back then. Two permanent employees. He full-time €2,600 net, she €1,150 net part-time plus 13th salary. 2 children aged 4 and 6. One consumer loan of €6,000 still outstanding, we pay €254 monthly. We manage financially well. No other obligations. 1 car. What conditions can we expect? We are probably bound to Ing-Diba because of the mortgage, right? Would this then be a follow-up financing?

Almost all banks now finance loan requests under 50,000 EUR without collateral, as the effort associated with an IVD (compliance with the requirements of §18a KWG or WiKR) otherwise erodes the margin.

Such loans are called "handshake loans" in the Sparkassen landscape, for example. Conditions range between 1.80 % and 3.20 % p.a. depending on the interest rate lock-in and credit assessment.

Example of good creditworthiness with a 10-year fixed interest period as a full amortization borrower: around 2.00 % p.a.

Inquire about such a loan at your house bank as well as at Ing-Diba. Assuming you have already been repaying for 2 years, you should have already obtained around 22,000 EUR of free land charges. Then Ing-Diba is likely to be cheaper than a blank modernization loan or handshake loan at the house bank.

I would simply take a look at a loan brokerage portal like Check24. As already mentioned, for this amount a land charge should not be necessary.

Ah ok, I wasn't aware of that. From when is a land charge usually due? 50,000? Because – if we redo the roof now, we would also add a dormer so that we have a shower in the upstairs bathroom and a better second escape route. We have the structural engineer in the family, so that shouldn’t lead to significant planning costs, but of course it will be more expensive overall. We are now waiting for the roofer’s offer and will talk to the structural engineer as well as the neighbor’s son, who is a carpenter. The whole thing is not very urgent but should be done by next year to avoid damage to the roof truss. In any case, we have time for proper planning.

I will make a non-binding inquiry at [Ing-Diba] and then we will see what they would offer us. Our house bank would also be another point of contact. We could also repay the consumer loan if necessary. The creditworthiness should be sufficient for them, right, or what do you think? Do you think there could be problems? We have been repaying the mortgage for about 2.5 years now.

Ah ok, I was not aware of that. From when is a land charge generally due? 50,000? Because - if we redo the roof now, we would also add a dormer so that we can have a shower in the upper bathroom and a better second escape route. We have a structural engineer in the family, so that should not incur major planning costs, but of course it will be more expensive overall. We are now waiting for the roofer’s offer and will talk to the structural engineer as well as the neighbors’ son, who is a carpenter. The whole thing is not very urgent, but should be done by next year to avoid damage to the roof structure. However, we definitely have time for proper planning.

Yes, usually 50 TEUR. However, in the end it is always an individual business decision by the bank. I think you can probably get a dormer for 10 TEUR. Partially renovating the bathroom will of course cost extra depending on what you have done. But if I were you, I wouldn’t look at 10 TEUR now... Do it in such a way that you are satisfied and finished with the roof, dormer, and bathroom. Then you don’t have to do it again later. That will certainly also cause some dirt...

I will make a non-binding inquiry at Ing-Diba and then we will see what they would offer us. Our house bank would also be another contact point. We could also pay off the consumer loan if necessary. Their creditworthiness should be sufficient, or what do you think? Do you think there could be problems? We have been paying off the mortgage for about 2.5 years now.

If you pay off the consumer loan, you will certainly have no problems obtaining the loan. The annuity would simply be eliminated and replaced by that of the new loan.

After 2.5 years, you still have more free land charge portions. Then Ing-Diba will certainly approve a loan for the required amount and – if this exceeds Ing-Diba’s unsecured limit – will want close review of the existing land charges.

Ing-Diba will almost certainly finance this. These are value-maintaining or value-creating investments in a property that they hold as collateral.

Just plan costs and submit the following to the bank for review:
- detailed cost breakdown
- income/expense statement including capital service sales calculation
- current asset statement

Additional documents may then be requested by the bank if necessary.

Good luck!

Simply request Ing-Diba and the 6k consumer loan with refinancing. Think the cheapest.