Construction financing | Is the procedure good? Your opinion and tips

We did it for a while like Lexmaul and used our contracts as piggy banks. In the end, we canceled them and thus significantly increased our equity again. In today’s interest rate phase, the [Bausparer] at least bring us nothing anymore. When we financed our first house, the interest rate was 8.7%. Back then, the [BV] still made sense.

Switching won’t bring you anything, since you always have allocation times – you can only change those a little. Motivation for that is because I pay it into the building savings account, which I don’t have access to, and currently put quite a lot into it – it adds up quickly.

Aha ok, that’s of course true. For me and my lady, unfortunately, the situation is such that until the planned start of construction, there are still loans open due to studies or further training, and we are trying to pay these off by then (education loan and master’s BAföG). Even though these incur little interest, I still want to start the construction financing completely from zero. Thus, there isn’t much left to put in.

We did it like Lexmaul for a while and used our contracts as a piggy bank. In the end, we canceled them and thus significantly increased our equity again. In today’s interest rate phase, the building savers bring us nothing anymore. When we financed our first house, the interest was 8.7%. Back then, the BV still made sense.

Yes, I agree with you, nowadays bank interest rates are cheaper than the building savings contract. Nevertheless, last year I took out a 50k euro building savings contract, which I also continue to save into as part of the construction financing. First, as a reserve for possibly bad times and second, if after the fixed interest period the rate goes up, you can use the building savings contract and repay a large part with it. If the building savings interest rate is still higher after 15-20 years and the loan is not needed then, you still have some cash.

That was the master plan: to have the property as equity by the start of construction and to have zero open loans regarding construction financing. But you know, things often turn out differently than you think.

Regarding the switch, the only option would probably be to consider a choice or multiple allocations. But we need to discuss this with the consultant today, and if there is no possibility, it will be fully utilized and terminated.

Good evening everyone,

today we have finally managed to reach Mr. Consultant, or rather he got back to us. Quote: He informed us that we could access the deposited money at any time, regardless of whether it is ready for allocation or not. The other case, should we need the loan, which was actually not planned but I will explain further down, we could switch the building savings contract to another variant. If we now change the contract from special to standard, an allocation would take only 1 year instead of 2.5 years. On the other hand, for the loan of €15,000 instead of 1.5% effective annual interest rate, it would be 2.75%.

Now why we might still need the loan or would. Yesterday we received a message from our city that the plots of land now have a significantly higher price than expected. The reason for this is that the system for draining surface water no longer goes into the normal pipes or sewage treatment plant as was previously the case in the city, but is instead led with special pipes or lines into an adjacent river. This will now be handled this way throughout the entire development area. Hence also the price per m² with up to a 15% surcharge. This would throw our calculation regarding equity for the land purchase somewhat off course and we would be short about €10,000–15,000.

The other point is, since the interest rate is quite high in my opinion, whether it wouldn’t be better to take out a loan with the bank for this money and repay it, like the building savings contract, until the actual house construction and financing. Hm..

If your building savings advisor said so, I assume that it is true. We wanted to use the credit balance of my wife's building savings contract, which is already fully saved but not yet ready for allocation, to pay for the kitchen. This also counts as a residential economic use. Call to the building society of the Deutsche Bank and explanation of our plan. Answer: Yes, of course you could withdraw the money, but then you would lose the special interest (ok - so far so clear) and the housing construction subsidies accrued so far (excuse me - really stupid - I had not heard that before).

The situation with the property is really unfortunate. But here you can see again - it can happen at any time that costs suddenly get out of control somewhere in the project (without your own causative behavior). This confirms once again: do not budget too tightly. (This is a general remark - not necessarily related to you.)

In the past, [Bausparvertrag] had a 6-month notice period upon termination. You either have to wait this out or pay a penalty of 0.5% per month on the balance, meaning a 3% loss. I don’t know if that is still the case with current contracts, but you are also talking about older contracts. You should also be aware of this in case of early termination! Something like this can also happen. On the other hand, many [BSK] are probably glad to be free of a few well-interest-bearing contracts.