Your opinion on my financing offer is requested

Hello everyone,

I have been reading here on and off for some time now and have already read many competent posts.

Therefore, I would also like to get your opinion on my financing offer. Currently, I am quite uncertain whether the offered financing is really the right one for me.

Now to the numbers:

Me 35 years old, 2650 euros net + her 35 years old, 900 euros (part-time) + rental income 250 euros + 1 x child benefit
1 son 3 years old, family planning completed

A two-family house is to be built together with my sister. All figures are only the share of me and my wife. The plot of land will be transferred to us by my mother and has long been in the family.

Investment
Land 65,000.00 €
Construction costs 209,800.00 €
Materials 6,100.00 €
Labor 9,400.00 €
Additional construction costs 15,500.00 €
Other costs 5,000.00 €
Total 310,800.00 €

Equity
Land
65,000.00 €
Cash assets 10,000.00 €
Salary share 9,400.00 €
Total 84,400.00 €

Financing requirement 226,400.00 €

As far as the calculation of my financial advisor.

My monthly installment should, if possible, not exceed 900 euros.

Now I have been offered the following:

1 x bank loan 57,000 15 years 2.3% effective interest rate 2% repayment
1 x KfW 153 50,000 is well known
2 x Wohnriester BVD 60,000 nominal interest rate 2.76% 15 years, afterwards nominal interest rate to 1.5%

Is this model even sensible or should I rather rely only on one annuity loan from the bank + KfW?

I think the interest rate risk is very high after 15-20 years.

Many thanks in advance for your comments

Greetings,

I think everyone might see the whole thing a little differently. My personal opinion on this is as follows.

In my view, it should be a bank loan for a larger amount and longer term. Possibly then accept that the interest rate is a bit higher, but you are better secured and can thus plan for longer with a fixed amount.

Regarding the KFW loan, I see this as a risk because, after (I believe I still remember) 10 years, it will be re-interest rated. Probably with a lower interest rate than the bank loan, but since you only have up to 1% repayment here, the remaining chunk is enormously high.

Since I am not a fan of the residential / BauRiester, this opinion (assessment) should certainly be seen as shared. I think you understand the process and that the accrued interest (taxes) will then have to be paid off in old age. Either as a lump sum payment where you get 30% forgiven or you pay off this amount monthly starting at retirement. That is why it is out of the question for me. No one knows how the whole thing will be taxed in 30 years. (For me personally, too opaque).

From my perspective, you have already answered it yourself that the risk of re-interesting in 10-15 years is too high for you, so I would change something.

Regards, Andi

but since you only have up to 1% repayment here

How is that supposed to be understood?

, Sorry, sorry, sorry... I misread earlier and assumed 150,000 :rolleyes:

I meant that currently you only pay 1% interest (KFW70), but with large amounts like e.g. 100,000€ / 150,000€ and the short term, usually at the end there's still a sizable sum left that then needs to be refinanced and also paid.

With the KfW programs, you have the option to choose the interest-only initial period and the term of the entire loan to be the same length (bullet loan). However, I see that more as a negative than a positive. Because the entire loan must then be repaid in one lump sum. You then need follow-up financing unless you have received a lot of money in the meantime.
But for follow-up financing, you won't get the same low interest rates as for the initial KfW loan. With a bullet loan, the follow-up financing no longer runs through KfW, but you have to find a bank loan. Also, with a bullet loan you always pay interest on the full loan amount — throughout the entire term. And that can get really expensive.

In the current interest phase, I would include a small portion from KFW, e.g. 50,000€ as described above. Because that is manageable and you still get funding.

As mentioned above, this is all my personal opinion. ;)

KFW funds (for Kfw 70) are anyway max. €50,000 per housing unit (still), and you can increase the repayment there so that in the end (after 10 years) the remaining debt remains manageable.

KFW funds (for KFW 70) are anyway max. €50,000 per residential unit (still), and you can just "increase" the repayment there so that in the end (after 10 years) the remaining debt stays manageable.

Yes, but you can combine the 153 with others and would thus get a max of, I believe, €150,000 KFW. But as mentioned, I had misread the above *shame on my head* I have little concern regarding the remaining amount after 10 years for the stated €50,000.