WilderSueden
2022-02-05 09:38:56
- #1
Provision interest is just one aspect. Another is the interest rate you get if you apply for financing only in a few months. And then, of course, there is the question of the construction time. The later you start, the longer you potentially have provision interest.
For my part, I signed in January 2021; at that time, I only had an email from the mayor saying that we reserved the plot of land. The land was still being developed. I first took care of financing in March, but then the municipality informed me that the development was significantly delayed. Then I started dealing with financing again at the end of September. I submitted the application in mid-October, received the binding approval in mid-November, and the contracts at the end of November. It also takes a little while until you are entered in the land register (just the waiting time for the notary appointment alone was 3 weeks), and without a land charge, the bank will not disburse the funds. You should plan for that time or be able to cover the first installment payments from your own equity.
What I did is certainly the more risk-affine variant. But with 20% equity, you can afford that risk. In your case, I really can’t estimate that now because numbers are always thrown around quite confusingly here. And with the low planned rate (a 400k loan should be 1600€, not 1200€), I wouldn’t risk it if the interest rates were 0.5% higher.
For my part, I signed in January 2021; at that time, I only had an email from the mayor saying that we reserved the plot of land. The land was still being developed. I first took care of financing in March, but then the municipality informed me that the development was significantly delayed. Then I started dealing with financing again at the end of September. I submitted the application in mid-October, received the binding approval in mid-November, and the contracts at the end of November. It also takes a little while until you are entered in the land register (just the waiting time for the notary appointment alone was 3 weeks), and without a land charge, the bank will not disburse the funds. You should plan for that time or be able to cover the first installment payments from your own equity.
What I did is certainly the more risk-affine variant. But with 20% equity, you can afford that risk. In your case, I really can’t estimate that now because numbers are always thrown around quite confusingly here. And with the low planned rate (a 400k loan should be 1600€, not 1200€), I wouldn’t risk it if the interest rates were 0.5% higher.