Tips on credit options

Hello, we are 2 adults (30/29) with a net income of €4300 plus child benefits (3) children, not married, and want to purchase a 280 sqm own home (200 sqm usable area) with a 500 sqm plot in the Thuringia area. However, we are having some difficulty finding the right loan. Our monthly rate should not exceed €1300 as we are also planning €500 for additional costs for this property. Unfortunately, our equity is only €23,000.

The loan amount is €335,000. €230,000 house purchase + €100,000 interior construction (conversion from commercial to residential use).

The house needs a bathroom/heating circuit replaced/partial underfloor heating/drywalling inside. It is a commercial property which we want to convert and use as residential space.

Own contribution is demolition of the old bathroom and laminate floor.

The additional costs including all expenses amount to €28,000.

So far, we have only received offers with Wohnriester which pay off the property after 30 years. But we do not like the conditions attached to Wohnriester. Therefore, we are looking for a possibility to find an alternative loan. Here, however, we only get an interest rate fix of 15 years, and afterwards, we have this significant residual debt for which, of course, there is no fixed interest rate.

What other options are there to manage the property with a rate of €1300? The term of 30 years is actually our maximum.

Thanks for some tips

1300 times 360 months / equals 30 years gives 468,000,- without interest. Need 335,000,- So that fits. Why does the bank reject this? Mortgage in relation to the house value too high? Unstable employment? Karsten

Hello Nordlys, I reject the offer from the bank because Wohnriester brings too many disadvantages. Furthermore, the bank has so far been unable to secure the interest rate for the 30 years in any way. Here I would like concepts with a building savings contract. And basically, the interest rate is too high. It is fixed at a nominal 2.39% for 15 years on a sum of €285,000, the rest is KFW – also here with residual debt. The uncertainty regarding future interest rates is simply too risky for me.

One problem why you do not get good conditions is certainly that you lack 5000€ for the acquisition incidental costs. It would be advisable to raise at least this 5000€ of additional equity.

Hello CCVio, thanks for the tip. I have asked this question at every bank so far. Allegedly, it is not a big problem and should not affect the conditions.

Realizing the 5000€ should still be possible.

I still wonder why no credit advisor addresses this.

I consider an interest rate fixed for 30 years to be not sensible. With sufficient repayment, the risk should be very manageable even at 15 years, and the costs much lower.