Semi-detached house: Estimated costs accurate and feasible, experiences?

Hello everyone,

my partner (30) and I (34), childless, are planning to buy a house. We are already quite desperately pondering, have already been to a financial advisor, and are now extremely confused.

About our financial situation:
Our total equity is 100k
We currently pay 650 cold rent + 150 additional costs.
Our monthly income is about 4500.

The house, a semi-detached house with 97 sqm in a fairly quiet area, basically needs to be gutted and renovated, meaning we are estimating the following approximate costs:

The electrical system needs to be redone (textile-covered cables) = €10,000
The bathroom needs to be redone. = 5 sqm €14,000
Water pipes must be completely redone. = €8,000
The heating is new, but old pipes should preferably also be new. = €8,000
Windows sooner or later need to be replaced = €15,000
The front door should be new. = €6,000
We have to buy a new kitchen €10,000
The roof is old but will probably need to be re-covered and insulated in a few years = €25,000

Chasing out slots, plastering, wallpapering, etc. are jobs we

The house costs €130,000
We have maximum equity of ~€100,000.

Our advisor suggested financing with 80% loan-to-value ratio at a loan amount of €155,000.
We don’t really understand that with our equity.
With a total sum of €242k (purchase price 135k + incidental costs 12k + renovation costs 80k + modernization costs (equity?) 15k), it would be a total sum of €242,000.
Minus €72k and €15k modernization costs, we would be at a loan of €155k. Why not keep the equity and finance a lower amount?
Apparently, a renovation plan would have to be made with the bank then.
Why not just finance purchase price + incidental costs with equity of e.g. €15,000?

Our suggestion was then to finance the purchase price minus incidental costs and renovate on our own. That means KP €135k + €12k incidental costs and putting in €15,000 equity.

How should we proceed now? Is our listing with all the renovation measures feasible with €100k?

Thanks for your experiences

Our proposal was then to finance the purchase price minus the incidental costs and to renovate on our own project. That means purchase price 135k + 12k incidental costs and contributing equity of 15,000.

This is a financing of well over 100% of the loan value. Today, hardly any banks do that anymore. They want to see equity upfront and not sometime later. So house purchase with equity 100 and 47 from a loan of X. Then pay for the renovation according to construction progress from the loan.

This is financing of well over 100% of the loan value. Hardly any banks do that nowadays. They want to see equity upfront and not later on. So house purchase with 100 equity and 47 from a loan of X. Then pay for the renovation from the loan according to the construction progress.

So is the 100 equity drawn from the bank as needed? My advisor said a renovation plan would have to be created, which would be time-consuming. A 100% financing would be possible, but instead of 3.4% it would then be 4.1%, depending on the bank.

So the 100 equity is drawn from the bank as needed?

Not as needed. For the payment of the purchase price.

A 100% financing would be possible, but instead of 3.4%, it would be 4.1% depending on the bank.

That is over €20,000 in additional interest over 30 years of loan term. Just so you feel better? What nonsense. But well, if you have money left over, you can of course do whatever you want with it. But for almost €1,000 in the first year, you could buy nice things instead of spending it on interest.

Ok, and how do we finance the renovations then?

It's slowly coming together... Our advisor calculated like this:

Purchase price 135k
Additional costs 12k
Renovation costs 80k
Modernization costs?? 15k (probably own work?)

Equity of 72k

Resulted in a loan of approx. 155k at 3.3%.

What I didn't understand: How high or up to which budget can I cover my renovations? Is that then the 80k?