Construction financing - offer in progress, renegotiating terms

Hello everyone,

we are currently arranging construction financing with the bank. Since the beginning of July, we have had an offer from the bank in process, which has been delayed for various reasons. Now our financial advisor has determined that some documents are still missing, which we are now obtaining and submitting.

Since the beginning of July, the interest rate has decreased and we would currently pay 60-70€ less per month. When we mentioned this to the bank advisor, he was (understandably from the bank’s perspective) not very pleased. The bank would have maintained the conditions if the interest rate had risen, the whole financing has already taken longer than usual, and furthermore, we are initially in the obligation to provide, so we have to be fair.

What do you think? So far, we have not signed anything yet and could theoretically still reject or also adjust the financing amount. I can partly understand the bank, however, it is not my fault that the bank is taking longer. Should we fight for the better interest rate, or will that just cause more trouble in the end?

We haven't signed anything yet and could theoretically still refuse or adjust the financing amount. I can partly understand the bank, however, it is not my fault that the bank is taking longer.

If you are ready for confrontation, get an offer from the competition. Actually, you can basically close the deal right away then. As long as nothing is signed, you have full freedom. And as long as the bank doesn't make a binding commitment (the processing could also end in a rejection), you are not morally obligated either.

Obtain an alternative offer and possibly take it to the bank. Otherwise, I would also say, as long as you are not bound to the bank, you can also contract with an alternative lender. Caution is only advised if other banks tempt you with low offers and then, for whatever reason, reject you and you have to go back to the [Ursprungsbank].

In the "Baukosten gehen aktuell um die Ecke" thread on the last few pages (please don’t read the whole thing ;)) there were also 1-2 mentions of financing and apparently it was adjusted downwards a few times recently. (Either already by the bank itself or upon request with some pressure)

In my opinion, it can be done or alternatively get another offer. The trend is currently also rather slightly declining, so maybe first collect documents and then follow up again?

Edit: By trend I mean rather possibly for next week (like how the interest rates lag behind the 10-year bond SWAP or something)... I don’t dare to estimate longer trends ;)

Thank you very much. We will definitely first collect the remaining documents and then see how the interest rate actually stands. Maybe by then the whole thing will have already been resolved. For the bank, we are also a potential customer they want to win.

Construction costs are currently skyrocketing

ehm "through the roof" of course ;) Otherwise, yes, I think so too. If it becomes foreseeable that you get half a percent less at other banks, then eventually the choice is rather to lose you as a customer or adjust the offer.