Consumer credit for land purchase?

So we also financed our property with equity and a consumer loan. That was last year at 3.18% and no one cared what was done with the money.

It is always like that. As long as nothing goes wrong, nobody cares. You can also drive around with 3 per mille. As long as you don't get caught or nothing and no one gets hurt, nothing will happen...

So "consumer credit" for land is not a problem.

The bank only wants a reason for why the money is being borrowed, and since for real estate, land, they usually grant a "land charge secured loan," they would recommend real estate financing here.

But now it depends on your creditworthiness and how quickly you repay the loan? If it is until the construction, meaning when you want to do real estate financing, is done, I would actually recommend consumer credit here, because it has advantages:
- special repayments at any time completely (partly free of charge (depends on the bank), otherwise 1% of the remaining amount, thus often cheaper than prepayment penalties in real estate financing)
- little effort
- no land charges (no further notary/court costs)
- probably only marginally more expensive than bridge financing/variable loan (if you want to build faster, little dependency on the bank)

therefore ;)

PS. maybe you have bought something from the €50,000 in the past, for example a car, then that serves as a reason... you are basically taking the money out of past consumption, replacing it with the consumer credit, and pushing the money into the land ;)

I would reconsider the whole thing.

Equity 75k at 20% equity means 375k for the house incl. land.

375k - 125k = 250k there is no house for that.

First ask what the min. % rate for equity is for the construction loan.

I thought I had read that currently it is rather min. 20%.

So "consumer credit" for land is not a problem.

The bank only wants a reason for why the money is borrowed, and since for real estate, land they usually grant a "mortgage-secured loan," they would recommend real estate financing here.

Otherwise, things are going well, right?
If the bank explicitly excludes that in the terms for the loan, then that is indeed a problem...

By the way, Interhyp told me exactly the same... they are reliable brokers after all...

Otherwise, things are going well, right? If the bank explicitly excludes that in the conditions for the loan, then that is definitely a problem... By the way, Interhyp told me the same thing... they are serious brokers...

well, I'll put it this way: I worked for many years at a bank that liked to grant "modernization loans" with a lower interest rate than regular "consumer loans" and 90% of the loans granted did NOT go into modernization, but instead cars were bought and money was spent on other consumer goods. and that was also "intended" by the BANK so you can also "keep things in perspective." PS. it’s exactly the same with building savings loans, for a "residential economic purpose" you are allowed to use the loan... this is confirmed to the building society by its own building savings advisor, and then it’s fine...