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

If your building society advisor said this, I assume it’s true. We wanted to use the balance of my wife’s fully saved, but not yet allocation-ready building savings contract to pay for the kitchen. That also counts as residential use. Called the building society of Deutsche Bank and explained our plan. Answer: Yes, of course you can withdraw the money, but then you lose the special interest (ok – that’s clear) and the residential building promotion premiums accrued so far (excuse me – really stupid – I had never heard of that before).

The situation with the property is really unfortunate. But here you can see again – it can happen anytime that costs suddenly get out of control somewhere in the project (without your own causal behavior). This confirms once again: don’t calculate too narrowly. (This is a general remark – not necessarily aimed at you.)

Yes, it was only yesterday that the advisor from Dank came and told us this broadly. Based on the information, we will now establish how we ultimately want to proceed. Then we should also contact the colleague again, who would handle the contractual aspects in case of a change and knows the details better, that was the advice. Because I had already thought that maybe the subsidies (premiums) would be lost if you withdraw your saved money prematurely.

There I can only agree with you completely. Today alone we are talking about approx. €15,000 which is just one more thing costing more than expected or planned. Now we are still lucky that we might be able to offset it somehow, but on the other hand, you have to say you won’t save anything or not much until the actual start of construction. If you want to repay €15,000 in 24 months, it’s simply an additional total burden of €15,000. We might still have an alternative with another (cheaper) piece of land, but that’s not certain yet.

In the past, building savings contracts had a 6-month notice period upon cancellation. You had to wait this out or pay a 0.5% penalty per month on the balance, i.e. a 3% loss. I don’t know if this is still the case with today’s contracts, but you’re also talking about older contracts. You should pay attention to that when terminating early! Such things can also exist. On the other hand, many Bausparkassen are probably glad to be rid of some well-interesting contracts.

Yes, I had also read or heard about the penalty interest, but hadn’t really remembered it anymore. As you say, they would certainly be glad to get rid of contracts with 1% interest on the balance, only at the moment the 2.7% bothers me, although over 2 years that isn’t that much after all.

Regards, Andi

I don't want to start a new thread, so here is my question.

How should I proceed most wisely in the following case?

We could purchase a plot of land in August. It will cost approximately 152,000 EURO. Currently, we have a total of 100,000 EURO in cash available as equity.

Since it is not yet certain whether we will actually be awarded the contract for this plot, we have not yet entered the planning phase.

That means we would only do this afterwards and possibly start building in 2016, since most construction companies in the Stuttgart area are fully booked.

How does one proceed in such a case? One loan for the land and the rest, i.e. the house, as a separate loan?

Thanks to you for your help.

Hm.. that is a good question,
so in our case we are doing it like this now, since our property has currently become 1/4 more expensive than planned or as previously indicated by the city, we are using our equity fully and the remaining amount will be compensated by a home savings contract. The money paid in so far flows in as well as the loan from this home savings contract. The loan of the home savings contract will then be repaid until the actually planned start of construction and the still outstanding amount will then be settled by money from the actual financing.
That was our plan now.. hm.. whether it is the best I don’t know at the moment either.

If equity is missing to purchase the property, you will have no choice but to finance a part of it. However, I would try to start construction this year and clarify the financing and procedure with a bank. You might then only need a loan.

If equity is missing to purchase the property, you will have no choice but to finance part of it. However, I would try to start construction this year as well and clarify the financing and procedure with a bank. Possibly you would only need a loan then.

Possibly it is a little different for us, since the two mentioned plots of land, one of which we would like to have, will probably be sold by the end of the year. Our planned construction project, however, is not supposed to start until the first quarter of 2018.

@Häuslenau3r:

You have completely different conditions than we do.

The development of our desired plot of land will probably begin about half a year earlier than we expected. And unlike you, we do not want to start building 2-3 years after purchasing the land, but if possible, immediately.

Since the final development plan will probably only be adopted shortly before the development, we also do not know if and which plot we will get.

Therefore, we cannot enter the planning phase at all, but only once it is confirmed whether we will get a plot. We already have a rough idea of what we want, so the planning phase will probably not take too much time. However, as already mentioned, the construction companies in the Stuttgart metropolitan area are so busy that construction can usually only begin in about half a year. That means spring 2016.