House exchange from "city" to countryside

Hello,

maybe someone here can help me.
We bought and renovated/converted a house in the center of a small town in southern Hesse in 2011/2012.
My wife now finds it too loud here and we would like to move a few kilometers into the "green".

We have found a possible property. However, we want to inspect it with an appraiser beforehand.

The financing in 2011 was done through the local Volksbank. I have a few questions about financing:

Approximately 108 thousand euros are still outstanding, divided as follows:

KFW 124 with about 49 thousand euros. Fixed until December 2021.
KFW 152 with about 18 thousand euros. Repayable at any time. Interest rate only 1%, though.
Building savings pre-financing with about 41 thousand euros. The saving phase ends in November 2021. This was a bad decision. I would not do it again.

There would be enough equity available to repay the KFW loans. However, I would prefer not to pay the prepayment penalties. If that would make the process easier, then that would also be an option.

- What would be the "best" financing approach here?
- I have no idea what my current house is worth. However, I suspect the value is higher than the new property. I would seek a conversation with a real estate agent here.
- How would the bridging finance work in the period from purchasing the new house until selling the old house?

I would appreciate any answers.

Best regards
[Objekttausch]

Hello property exchange,

in principle, the loans could also be transferred to the new property via a pledge exchange, which would, however, have the consequence that any resulting financing need due to priority there would also have to be financed. This is not recommended; rather, I would be willing to pay the prepayment penalty, which cannot be that high, especially since part of these interest charges will be earned again through the lower interest rate of the new loan.

The difference, i.e., the capital to be applied from the sales proceeds to the principal of the existing loans, is bridge-financed; conditions depend on the choice of the bank, which may have to provide additional financing needs, ranging between 2% - 4%.

The loans could possibly not yet be repaid from equity capital, as the bank does not have to agree to the repayment; however, this is possible with the KfW loan. It seems reasonable here to repay the loans from the sales proceeds during the sale (which results in a special right of termination according to the Building Code §490).

The difference between the principal and the sales proceeds plus the existing equity capital must be repaid from the total costs (including any possible prepayment penalty) in the financing plan and results in the financing requirement. The difference between the principal and the sales proceeds is bridge-financed variably, the rest long-term, as desired.

The following steps are now pending:

1) Calculation of the prepayment interest
2) Determination of the market value of the existing property for setting the sales price
3) Free review of the existing loans for formal errors or faulty revocation instructions by a specialist lawyer, since the eternal right of revocation may still apply and the old contract could still be revoked today. I assume the current mortgage creditor is the Sparkasse; in that case, there would be very, very good chances that the revocation joker can be used.
4) Preparation of the cost/financing plan and the requirement to determine the variable and the long-term loan in order to then map the concept with the conditions upon it.

Experienced and independent financing brokers offer this service (all 4) free of charge.

Hello, please check in program 124 if you can fully repay it without VVE. With old contracts it was possible. Otherwise, only the pre-financing would remain.

Old contracts?

The loan is from 2011/2012, a VFE definitely applies.

Great. Thank you very much for the detailed explanations. Then the next steps are known.

Super. Thank you very much for the detailed explanations. Then the next steps are known.

You're welcome, my pleasure