House move - How to plan interim financing?

We have basically done exactly that just now.

The order was as follows for us:
Talk to the bank about how a security swap and loan assumption generally looks: For us, it was possible if the loan-to-value ratio did not increase.
Our house in the city was not paid off, remaining loan of just under 150k from 2017 with 1.4% interest.
We were then looking for an alternative in the countryside and at the same time had the market value of our house assessed by a realtor. According to the realtor a maximum of 450k and also according to the bank not so easy, because only a few people have the capital in our region.

Then we found something and did the following:
Obtained financing confirmation from the bank. The bridge financing could then be at most as high as the minimum sale proceeds determined by the bank for our previous building. The issuance of higher bridge financing, so that a residual amount would remain, is apparently no longer possible according to bank guidelines.
It is important that the minimum value was used - the bank calculated 390k for us. Since we wanted to move in together with my mother-in-law, her current residence was also included (also without further security, only by proof of ownership, but with a significant discount), so that bridge financing up to a maximum of 550k was possible.
Everything above that as well as additional purchase costs we had to pay from equity.
The bridge financing ran for a maximum of 24 months with the possibility of immediate repayment in unlimited amounts and 5% interest.
It was also calculated whether we could manage the additional burden from the bridge financing (2500€/month) in addition to ongoing expenses from our household income. Of course, we could not, so we had to prove an additional 24*2500€ as equity.
The actual difficulty was therefore to prove enough money for incidental costs and potentially possible interest payments for 24 months.
That should also apply if the purchase price is below your planned proceeds because your money is tied up until then.

As soon as we had the notary appointment, we could take care of the sale of our house. Since we still needed some lead time for renovations, we only started looking for buyers with handover 2 months after the notary appointment. Luckily it went quite fast without a realtor for 500k (so much for the realtor’s estimate - but the property was also very unique) and we could have sold it 3-4 more times in the following months.

So we had “only” 4 months of bridge financing at 2500€ interest per month. If you don’t need much renovation, you can try to stretch the handover date at purchase to 3-4 months. Depending on the applicant situation and the seller’s situation, that can be quite possible. Then you have a bit more lead time for your house.

For example, the buyers of our house only had one month of interest payments for the bridge financing - but also had to prove capital for 24 months (or have enough income).

Offtopic: Life in the countryside is not necessarily quiet in July and August if there is a lot of agriculture nearby. The village is quiet, but if a farmer, for example, has his machines or a storage directly next to your house, there is no peace. Luckily it’s limited for us, but we would not have expected the tractor traffic in the country to be so intense.

Thank you very much for the detailed report, it helps us a lot.

By "land" we don’t necessarily mean next to farms. When the farmer spreads his slurry, that is anything but pleasant. We would prefer a location on the edge of the forest. :)

The usage concession would also be an idea. If you find a buyer who agrees to that, it would be the best solution. I think you can then clarify with the real estate agent whether something like that has a chance of success.

In a rental apartment, however, they do not have free access outside, which they presumably have in the house. If they are not used to that, you will not enjoy the apartment.

Then you simply rent a holiday home.

Especially since the rental apartment would have to be correspondingly large.

see above.
What would be the consequence? But well, if you set the priorities or rather no-gos for yourself in such a way that “things are out of the question,” then you have to live with it.

That the interim financing must be fully proven as equity is understandable but is of course also a hindrance.

For example, if I calculate €450,000 and pay 5% p.a., that would be €45,000. We do have the equity, but that would be intended for renovation measures, e.g., solar panels or heating. That would be €1,875 per month, but then another €1,000 would be added due to the old loan. Whether the bank then says that my net income of just under €4,000 is enough to cover both... we'll see.

But you are of course right, I have to write to the bank and first check how much interim financing they would even approve for us at most.

Thank you also for the tip about the Gutachterausschuss, you can actually start online queries directly and in our residential area the purchase price per m² has been around €4000 since 2020, but the houses from the query were 7-8 years older. With 133 m² of living space that we have, we come to €532,000, which corresponds well with the listing prices on the real estate portals.

You can set the bridge financing as a bullet loan - then there should be no problem. You combine the loan and accrued interest after the sale in one.