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How much equity is required for a KfW loan? (Property)

Hello,

About 1.5 years ago my husband took out a loan (50k €) for his brother because he has a lot of debts (please don’t ask what’s the point …).

But now we have come to a point where we actually want to buy a house / apartment.

In principle, we could probably pay off this loan out of our own pocket by the end of the year, but then we would no longer have equity to take out a loan.

Hence the question:

Are we better off if we have no more credit, but also no equity, or if the loan is still running and we have 15-20% equity in return + possibly replace the existing loan with the new loan? Is that even possible?

We both have a net income of just under 5000 € and apart from this loan (almost 800 € per month) no extraordinary expenses. So the installments for a home loan shouldn’t be a problem.

I am happy about your answers.

ps. all of this is still very hypothetical. In fact, we’ve already come to terms with the fact that we won’t buy a property until the loan has been paid off, but maybe that can be accelerated.


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