Renovation loan after gift

  • Erstellt am 2018-11-14 15:01:17

Oliver1989

2018-11-14 15:01:17
  • #1
Hello everyone,

We are currently considering that I take over my parents' house now and that they want to gift it to me.
Currently, my parents and my grandfather live in the house (right of residence according to §428).
My parents would like to move out of the house due to family disputes with my grandfather and because it is becoming too much for them (garden maintenance, etc.).
The idea now is that my wife and I move into the upper apartment (the two apartments are not directly separated, so there is no separate entrance).
Since the house was built in 1950 and renovation and refurbishment work are due (interior doors, radiators, floors, walls, the bathroom is to be enlarged, the roof has to be re-roofed and insulated, possibly replace windows, etc.), we are wondering how to best approach the issue.
Unfortunately, my grandfather has also reached an age where he may live only a maximum of 5 or 10 more years (as sad as that is). Since we plan to start having children in 2-3 years, afterwards we would like to live in the entire house.
That means we would live in the upper apartment for the first 5-10 years and later include the lower apartment.

Since we would be gifted the house by my parents, I would of course like to renovate the house extensively as described above. I have already read that renovation loans are sometimes more expensive than construction loans and have significantly shorter terms.

How is the best way to approach this? We already have an appointment at the bank next week, but I would like to have some information beforehand.
Do you have any tips, hints, or advice?
If we were to move in now, we would have to invest about (just roughly estimated for now) €110,000-130,000. Once we have the entire house, an estimated additional €50,000-70,000 would be needed.

Monthly, we could pay about €800 (if my wife works part-time when the child is here). Until the child is born or if she works full-time again, larger special repayments or a higher installment would of course be possible.
With a construction loan, I would say that we can handle the monthly payments. But how does it look with a renovation loan? Are there such loans available in this amount at all?

The house would definitely increase in value compared to now. It has a 1000 sqm plot and is located in a top location where we probably couldn’t afford a house of this size otherwise.

Thank you very much for your tips and advice.
 

caddar

2018-11-14 16:00:48
  • #2
If you exceed a certain amount in the renovation sum (about 50000€?) and can have a land charge registered, there is no difference between a construction and renovation loan. Only smaller loans without a land charge are more expensive, for example, just to renew the heating system. I am currently gutting a house from the 60s and have easily obtained normal loan conditions.
 

Ibaaa

2018-11-14 16:12:52
  • #3
There are plenty of loan options at KFW. I would take a look at all of them, as they are also for existing buildings. And always go to an independent financial advisor.
 

apokolok

2018-11-14 16:23:47
  • #4
If the land register is unencumbered and the location is good, meaning the value is high, you should get very good conditions. KfW can make sense in some cases, but it does not have to with the current interest rates.
 

hanse987

2018-11-14 17:00:28
  • #5
The gift, if it goes really badly, has a catch.

You are still quite young at 27 years old, and thus your parents will not be very old yet. But if in the 10 years following the gift the (hopefully unlikely) case occurs that one or both of them become in need of care and the savings are no longer sufficient to pay for the care, the house will be used. Either you pay or the house will be liquidated.
 

HilfeHilfe

2018-11-14 17:10:21
  • #6
Correct (the thing with the gift). What is the current value of the house and who wants to renovate? You yourselves or will craftsmen be hired? A bank requires a detailed cost breakdown for this volume, preferably quotes, to review here. The question is also which bank will subordinate to the right of residence.
 

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