Bridge financing land

Hello everyone,

we have found a plot of land that we would like to buy.

Since development in the building area is only just beginning, the earliest one can start building is in spring. It will probably be summer at the earliest.

Now the question arises how to solve the financing in the smartest way.
50,000€ would need to be financed, the rest we can cover from our own capital.
The plan is to repay this amount as soon as construction can start with the large loan.

I have three offers. Two from Volksbank (which is both the realtor and the house bank of my partner), and one from Dr. Klein.

If we finance with Volksbank, we receive about 650€ discount on the realtor’s commission. Of course, when you spread this over the short term of a maximum of three-quarters of a year, that is a large sum.

Offers from Volksbank:

1. Loan with variable interest rate, 1.85%
2. Wunschkredit, 2.905%, but without registration of a land charge

Offer from Dr. Klein:
Loan with variable interest rate, 1.62%

At first glance, the Wunschkredit offer looked attractive despite the higher interest rate because you save the costs for registering the land charge.
But now the advisor from Dr. Klein said that you can transfer the land charge free of charge to the new financing bank with the large loan; so this argument is moot because the costs will come up sooner or later anyway.
Is that true? If yes, then offer 2 from Volksbank is out.

Then offer 1 from Volksbank should be the best, since we get the discount on the realtor’s commission.

Do I see this correctly or am I making a mistake?

Best regards
Daniel

Anyone have a comment?

At first glance, the offer with the desired loan looked attractive despite the higher interest rates because you save the costs for registering the land charge. But now the advisor from Dr. Klein said that the land charge can be transferred free of charge to the new financing bank with the large loan, so this argument is irrelevant since the costs will occur sooner or later anyway. Is that correct? If yes, then offer 2 from Volksbank is out.

If you assume one year of interim financing, everything is within €500. My personal opinion: the probability that you will finance with Volksbank if you have the comparisons from Dr. Klein is probably well below 10%. Therefore, in my opinion, the first offer from Volksbank is out.

To what extent the land charge can be transferred free of charge, I cannot say. Honestly, I can’t really imagine it, but the bankers here in the forum (e.g. ) can probably help you with that. Even if that were the case, you have to go to the notary twice and pay such notary flat rates, like administrative fees/postage fees, etc. twice. This way, at least part of the interest gain compared to the second offer is lost. What is actually cheaper is therefore difficult to predict.

Can you get out of the second Volksbank loan at any time?

Yes, you can exit the 2nd offer from Volksbank (the so-called "Wunschkredit") at any time and fully repay it without any prepayment penalty.

The offer from Dr. Klein has disqualified itself with your description.

Neither is the assignment of a land charge free of charge (although that would theoretically still be possible, I have never experienced it). Nor does such a thing make sense for one year. The incoming bank usually charges something around 0.5-1.0% of the property amount if the bank itself has a seal right (e.g. many savings banks), with other banks at least the notary fees for the assignment come on top. The costs are even higher. If the transferring bank insists on the registration of the assignment, then court fees are added. Overall, for half a year, this is probably almost more expensive than all the interest incurred. This is just a gut feeling.

First of all, thanks for your answers!

That means for me now in plain language and to get straight to the point: The statement by Dr. Klein people was bulls***?

Then, conversely, it also means that presumably the "desired loan" despite the higher interest rates is probably the cheapest and most stress-free offer overall due to the discount on the brokerage fee?