Is follow-up financing possible under these conditions?

Hello,

my question relates to the following situation.

Mr. X and Mrs. X have built a house in a good location and took out a loan for financing. They have two children together and are currently divorcing. Mrs. X continues to live in the house with both children. She alone is currently responsible for servicing the loan. The repayment (since a relatively high repayment rate was agreed upon at the time) has been almost suspended by the financing bank as a gesture of goodwill (and documented in writing). The term of this agreement lasts almost until the end of the fixed interest period. This is to enable Mrs. X to "stay living" there. Both have signed the loan agreement, which will be terminated at the end of the fixed interest period to avoid further indebting Mr. X. Mr. X is not registered in the land register.

Regarding the numbers:
- Fixed interest period ends in 2.5 years
- Outstanding balance then still about €340,000
- Current house and land value approximately €680,000
- Mr. X is entitled to €100,000 from the marriage (capital gains, the money is tied up in the house)
- Mrs. X’s total debts amount to about €440,000, the rest belongs to her (€240,000)
- Mrs. X earns under €2,000 from her job, she also receives about €1,400 in child benefits and child support. Both children will each reach the age of 18 during the further financing period in about 10 years.
- Mr. X’s income plays no role in a refinancing/follow-up financing.

Mr. X has three options in this situation (as unlikely as it may be for Mr. X to choose one or the other, they exist):

1. He re-enters a loan agreement, e.g., as a guarantor. Mrs. X would then have to take out a loan of €340,000.
2. Deferred payment or waives €100,000. Even in this case, Mrs. X would have to take out a loan of €340,000.
3. He insists on a €100,000 payout, which would force Mrs. X to take out financing of €440,000.

But to not go too deeply into the overall financial situation, the following question: to those of you who are currently more involved in banking and financing than I am:

Is it possible to find a bank that would grant Mrs. X a loan of at least €340,000 under the conditions mentioned above? And if yes, at what interest rate would that be possible?

Side note: The currently financing bank does not really see this possibility at the moment, but is reviewing the situation in detail once again. What might be feared is that a bank could be found which in a worst-case scenario says: Well, if Mrs. X stops paying, she can just sell the house and the bank will get its money back anyway (corresponding to a certain residual risk) because of the value.

Thanks in advance for your assessment.

Hm well, with 1000€ you can barely finance 440k with 2% repayment. But you hardly pay off anything that way. At the latest when child benefit/maintenance stops, she will have to sell.

Maybe talk to a local bank or broker. Maybe someone will be found for a bullet loan?

Or someone she knows buys it and rents it to her?

Hm well, with €1000 you can just about finance 440k with 2% repayment. But you hardly pay off anything that way.

It also depends on Mrs. X's age. According to the Residential Real Estate Loan Directive, the lending bank must ensure that the borrower can still service the loan in old age. The older Mrs. X is now, the more difficult that becomes. Otherwise, I agree with @guckguck2, with <€1,000 you can service a loan of €440,000 at 2% repayment (cf. e.g. fmh query).

It will come down specifically to the bank. Flat rates are now being applied for living expenses. It is quite possible that these exceed the actual costs and already break everything. Difficult situation...

Hello, I do not see any financing over 440k with the [Rahmenbedingungen]. Even 340k is already unrealistic. The likely scenario is the sale of the property.

Thank you for your factual contribution. I have read quite a few other things here, which often are not pleasant, even though of course the overall situation was neither pleasant nor desired. I can contribute little regarding your questions. However, I myself was once "in divorce" and was not able to finance €100,000 because of that status. It was not due to the salary. To the bank, I was a misleading packaging/surprise bag, as they did not want/could not determine what I would ultimately be left with.