Construction start September 2021 - When to take care of financing?

So I signed at the bank on Monday and at the notary on Wednesday.

When I sign a contract, I personally want to be sure that I can fulfill the resulting obligations. Ergo, for me, the signed financing should come before the house purchase. But apparently that's already settled if the construction contract is already signed.

Otherwise... where else should interest rates fall? "End of '15," as writes, there was still room to go down. I signed my financing almost exactly two years ago (19.11.18), the rates would surely be almost 1% lower today. But a gamble on 0.5% is probably no longer possible today (at least not within a few weeks/months).

So I would plan the timing so that I can calmly organize all the documents and possibly take an extra round if the bank that now gave a blank commitment does not offer a great deal after all. So roughly 3-6 months before construction start you can already get active.

I always thought a financing confirmation is issued by the bank after signing the loan agreement? What else is such a letter worth? If I look at the current processing times at the banks, a complete credit check is never done for that, right?

What is such a letter worth otherwise? When I look at the current processing times at the banks, they never do a full credit check for that, do they?

A financing confirmation is issued right at the beginning. But it is not worth the paper it is printed on. "We can imagine, subject to further property and creditworthiness checks,...".
The real financing confirmation, which is basically equivalent to a loan commitment, involves costs, for example. The bank has to provide equity for it, etc. And the complete property and creditworthiness check must have been carried out (including appraisal).
But it gives the seller a good feeling ;)

I always thought a financing confirmation was issued by the bank after signing the loan agreement?

Then you don’t need a confirmation anymore because you can show the loan agreement.

Then you don't need any confirmation anymore, because you can just show the loan agreement.

Luckily, we didn’t need any financing confirmation. But that was one of the first questions from the financing advisor, since some general contractors are apparently very particular and want a separate letter for it. Not all banks do that (I think Hypo was mentioned?) and even fewer accept a form from the general contractor for that.

A financing confirmation is given right at the beginning. But it's not worth the paper it's written on. "We can imagine, subject to further property and credit checks, ...".

In that case, I probably wouldn’t play games either and would just accept the commitment fees. Depending on the fixed interest period, it also doesn’t make sense (against an interest premium) to extend the interest-free commitment period.

In this case, I probably wouldn't gamble either and would simply accept the commitment interest. Depending on the fixed interest period, it also doesn't make sense (against an interest surcharge) to extend the commitment interest-free period.

Well, the commitment interest isn't exactly nothing, somewhere between 1.8 - 3.0% p.a., which quickly amounts to >500€ per month. Without any compensation whatsoever. (Except for more peaceful sleep) Considering that some people in the forum haggle over the second decimal place of the effective interest rate, it's rather surprising, since equity capital is supposed to be contributed first. So why (if the conditions allow) bring in "expensive" debt capital before the equity capital is even touched? A rise in interest rates is currently rather not foreseeable. At least according to my crystal ball.

Well, the commitment interest rates are not entirely without cost, somewhere between 1.8 - 3.0% p.a., which quickly amounts to >500€ per month. Without any tangible benefit. (Except for a more peaceful sleep) Given that some in the forum haggle over the 2nd decimal place of the effective interest rate, it’s rather surprising, since equity capital is to be invested primarily. So why (if conditions allow) bring in “expensive” debt first before the equity capital is even touched? An increase in interest rates is currently rather unlikely. At least according to my crystal ball.

Yes, unfortunately for most it is closer to 3%. We looked at how much of the loan amount “should” have been drawn after 1 year and calculated 3% interest on the remaining amount. Then compared that to the increased interest rate for 18 months of commitment-free period. In the end, it was not worth it for us. I must say, however, that we also decided on a very long fixed interest period, opinions differ on that. Starting construction now and happily burning through the equity capital even before loan approval would actually be too risky for me. This also changes the basis for the original financing confirmation. I exchange my cash for foundation slab, shell construction, or whatever. The bank might then “possibly” assess that very differently and suddenly apply a different loan-to-value ratio?! Ultimately, it depends on one’s own ability to sleep peacefully. I also do not expect a jump in interest rates either way, but the evaluation criteria could change.