Procedure bank, notary, etc....

Hello, I have a question.

After a long back and forth (14 days processing), we finally received an approval from the bank (verbally), the appointment at the bank is on Thursday at 4 pm....

What will happen there? What do I need to keep in mind?

I'm only asking because we have now had bad experiences with banks and are a bit suspicious.

Short story: At the beginning of the year we received a financing offer from [Dt. Bank], which was very good with a 20-year term and fixed interest rate. Then suddenly the bank person was sick and in the meantime it was said that it would be approved verbally. But now they supposedly negotiated an even better offer for us where we pay 80 euros less. On Saturday the great supposed offer came. It was with a 35-year term and a great building savings contract that the bank would have deposited 30,000 euros into. The bank would have approved us 110,000 instead of just 80,000 as requested.

Now on Monday we wrote that we do not want that, we want 20 years and 20 years fixed interest rate as in the first financing offer. Now the advisor said she changed that with the building savings contract and they are supposedly finished after 20 years. I am curious on Thursday.

What do I need to keep in mind on Thursday? How is it with the notary appointment? When will the payout from [Deutsche Bank] happen?

What happens now?

Thank you for your answers?

Hello Tina,

I’m only asking because we have now had bad experiences with the banks and are a bit suspicious... What do I need to keep in mind on Thursday?

From the way your post reads here, you don’t have much knowledge about banking matters. That’s why I strongly advise you to seek professional advice in the form of an independent mortgage broker! If you really want well-meaning advice, then under no circumstances sign the loan agreement on Thursday, but take your time and have an external reference offer prepared by the above-mentioned broker – can be done within half an hour if you provide the relevant documents – and have all your open questions answered at the same time. Banking transactions are comparable to building a house in that they largely depend on trust, and there should be no "bad feelings" when signing the contract.

If you live in the Rhineland, I can gladly send you a recommendation for an independent financial broker’s office; if you live further away: feed Aunt Google with "independent mortgage broker + place of residence" and you will get plenty of hits. The Homeowners’ Protection Association, consumer advice centers, and architects’ chambers can also provide you with references.

Kind regards

Exactly, we initially had an offer of 80,000.

Of that, 50,000 would have gone through the Dt. Bank and 30,000 through KFW = 80,000 euros. (20 years fixed interest and term 20 years) = 507 euros monthly without residual debt

We have 20,000 in equity, so that would be a total of 100,000 for purchase and renovation etc etc...

Because the bank branch manager or someone was sick for 2 weeks, everything was delayed and we called to ask what was going on etc., but we were told verbally that it had been approved and they had negotiated a great offer for us, where we would be under 450 euros.

Well, and now last Saturday we then received an offer by email

30,000 Kfw 1, then 50,000 through Dt. Bank with a building society contract, and then another 20,000 through kfw 2 = 110,000 euros (30,000 the bank would pay directly into the building society and that would then run for 5 years and a bit, then 20 years at 180 euros.

Our equity of 20,000 euros would somehow have been included in the financing. The disadvantage of this offer was that the term was 30 years for Kfw 1 and the other 35 years for Kfw 2. = monthly rate 419 euros

We then wrote an email that we did not like offer no. 2 at all, because the term of 20 years and fixed interest for 20 years were not taken into account.

Then yesterday we received a callback saying that they have approved the loan so far and that we should both come by on Thursday. We then asked if the first offer had been approved?! The advisor then said that they had taken out the building society contract, but how and what now, I have no idea. I only know that allegedly we would then have to pay 519 euros....

Dear Tina21082,

I can tell that you are very uncertain. I am deliberately leaving out the matter of the building savings contract for now.

From your description it is clear:
Total volume for the purchase object: approx. €100,000
Equity contributed: €20,000
Financing requirement: €80,000
Interest lock-in period: 20 years
Repayment: full repayment (remaining debt at the end of the interest lock-in period €0)

Currently, an effective annual interest rate of about 4.75% is relatively market-conform for this. This results mathematically in a monthly payment of about €510 - 530. The offer from the German bank therefore seems market-conform within the above conditions. To what extent KFW funds have now been included there can only be speculated.

If you do not like the bank’s offer with the monthly burden, then for example the possibility would exist to reduce the repayment and at the end of the term simply be left with a residual debt, which would then either have to be refinanced or paid back in one lump sum.

One more well-intentioned piece of advice, Tina: As the posts above appear to me, you are mixing up some terms and facts within the financing framework. I see the risk here that the financing bank "sugarcoats" their offer and for example tries to sell you a building savings contract for the financing. I ask you in your own interest not to sign the contract immediately on Thursday. It is important that YOU UNDERSTAND the contents and their possible resulting consequences. It is not at all a disaster not to fully understand a loan application. There are enough specialists who can explain it to you.
Tip: try to take the loan contract with you yourself on Thursday (“Want to still have the weekend to think it over”) and get independent advice based on it on Friday and over the weekend. Feel free to also go to other banks and compare!

Best regards