Is additional financing possible or necessary?

Hello everyone,
I have a quick question, out of pure curiosity, as this problem might possibly occur for me. I have concluded a real estate consumer loan agreement with the bank for a payout to an heir (house takeover) and the necessary renovation work amounting to 75,000 euros.

After receiving the last invoice for the planned modernization work, I now realize that the budget has been exceeded by about 4,500 euros.

My questions regarding this:

1.) Would the bank probably pay this invoice initially anyway, and a refinancing for the additional requirement of about 4,500 euros would have to be arranged?

2.) If refinancing had to be arranged, would I probably receive it in this amount and would an extension of the land charge registration be necessary for this sum?

Key data at the time of conclusion of the original loan: single, permanent employment, at the same company for 10 years, 28 years old, no other loans, financing etc., net monthly income 2,400 euros

Key data for refinancing: married, permanent employment, at the same company for 12 years, 30 years old, no other loans, financing etc., net monthly income 2,600 euros

However, the house belongs solely to me and there is a marriage contract. Accordingly, my wife is not to guarantee the loan or be named in the loan agreement. However, my wife is also employed, has one child, and earns about 1,300 euros net.

3.) Should one refinance already when noticing that the budget is tight, even if it is not yet definitively clear how high the refinancing will need to be?

Thank you very much!

1) The bank is not obliged to do anything, but of course it is also interested in having a happy customer and a finished house as collateral. So, without knowing your financial framework details in depth... if you can afford it, very likely yes.

2) Probably not. In most cases, this will be solved through some kind of modernization loan. Expect about 3-4% interest. Considering the amount and the saved costs for the land charge, this is likely the cheaper option. Just make sure the whole thing is fully repaid within 10 years at the latest (or earlier depending on your desired installment).

3) It’s best to speak with your bank and have them grant you a framework loan (e.g. 10,000 EUR) before the planned additional financing. Whether as an overdraft on your current account or a secondary account. You can then convert it accordingly. However, you should fully disclose the entire plan to your advisor. Most will cooperate without problems. The downside of the whole setup: those who have more available than they actually need usually (often) also spend more. It requires discipline or it’s fine and not only makes things look good but even better. A balancing act, as so often.

Thank you for the answer

Regarding 1 My bank advisor said at the time of signing the contract that a follow-up financing of up to 5,000 euros, in his opinion, would not be a problem. Also, a land registry entry would probably not be necessary. However, this statement is already a few months old.

Regarding 2 Without having calculated it now... How high would the monthly burden be approximately for a modernization loan if it is supposed to be paid off after about 10 years? About 50 euros monthly including interest?

Regarding 3 Well, I do submit my invoices for the renovation work to the bank and do not pay them myself. So an overdraft would not be useful for me.

Either they give you the €5000 without bureaucracy or you simply take out a consumer loan, overdraft, or revolving credit. It then costs 6-7% and should be repaid quickly. However, it is easier to process if someone seriously wants to start with [Grundbucheinträgen]...

Ok, thanks

But from your perspective and with my, albeit rather sparse information, a top-up financing should be possible without any problem, right? Or do you think the bank will simply not pay the last invoice and will probably not grant me top-up financing over that amount? As I said, I have no other loans and always pay on time. There are also no negative entries in the credit record, etc.

Sorry, I don't understand the problem... It's just about €4,500, right? If necessary, I'd just ask a relative or a friend and pay it off again over the course of a year. Otherwise, you can get a small loan everywhere for such a contract. Although with high interest, but it's then paid off quite quickly...